Bitcoin

Bitcoin is falling toward levels last seen in July 2021, part of a wider retreat in cryptocurrencies amid a global flight from riskier investments.

Bitcoin is falling toward levels last seen in July 2021, part of a wider retreat in cryptocurrencies amid a global flight from riskier investments.

I write about how bitcoin, crypto and blockchain can change the world. Follow. May 9, 2022, 07:32am EDT ...

Why it matters: UST relies on luna to keep its price of a dollar via a set of on-chain mint and burn mechanisms. On guard: After Terra's algorithmic stablecoin TerraUSD (UST) briefly lost its dollar peg over the weekend, the Luna Foundation Guard (LFG) has announced this morning it will lend out hundreds of millions of dollars worth of bitcoin and the stablecoin UST in order to maintain it. LFG's governing council includes some of the biggest names in decentralized finance (DeFi), such as Jump Crypto president Kanav Kariya. "As markets recover, we plan to have the [UST] loan redeemed to us in bitcoin, increasing the size of our total reserves," Kwon said. Background: LFG is non-profit group that was formed in January to support the Terra ecosystem as well as "the sustainability and stability of Terra’s algorithmic stablecoins" and plans to accumulate a $10 billion bitcoin-based reserve intended to serve as a support mechanism for UST's peg. The Singapore-based LFG said it would loan $750 million worth of bitcoin to trading companies as well as $750 million in UST to accumulate bitcoin in an attempt to stabilize the market.

A multibillion-dollar bet that bitcoin can act as a “reserve currency” for the crypto economy is already being tested as UST, a controversial stablecoin, ...

The plan is to eventually allow UST holders to redeem their tokens in exchange for bitcoin. The world's largest digital coin dropped below $33,000 on Monday, slumping to its lowest level since July 2021. LFG bought another $1.5 billion in bitcoin last week, taking its total reserves to about $3.5 billion. "BTC will likely go lower before it bounces back when short-sellers take profit." The latest challenge arrived over the weekend. Terra's protocols also feature an arbitrage mechanism, where investors can exploit deviating prices in each of the tokens. But that's done little to assuage investors' concerns about the implications for bitcoin. That includes lending $750 million worth of bitcoin to trading firms to "protect the UST peg" and a further 750 million in UST being lent out to buy more bitcoin "as market conditions normalize." The idea is that bitcoin would act as the "reserve currency" for the Terra ecosystem. The model is designed to even out supply and demand for UST. When the price of UST is too high, users are incentivized to burn luna and create new UST, increasing the stablecoin's supply while also decreasing the amount of luna in circulation. A multibillion-dollar bet that bitcoin can act as a "reserve currency" for the crypto economy is already being tested as UST, a controversial stablecoin, struggles to maintain its $1 peg. UST dropped close to 99 cents over the weekend, fueling fears of a potential "bank run" that could force Terra, the project behind it, to dip into a $3.5 billion pile of bitcoin to support the token.

However, despite the sharp fall in the price, the supremacy of Bitcoin among crypto tokens has increased. Bitcoins dominance is currently 41.64 per cent, ...

We anticipate a strong Q4 2022 for crypto assets," he added. Bitcoin’s dominance is currently 41.64 per cent, which was around 36-38 per cent at the peak. "If this downtrend continues, we may also see BTC testing the $30,000 level. Patience will be key. However, despite the sharp fall in the price, the supremacy of Bitcoin among crypto tokens has increased. The largest token among crypto assets has been commanding a market cap of more than $635 billion with a 13 per cent rise in trading volume as Bitcoins worth more than $37.26 billion exchanged hands in the last 24 hours.

The cryptocurrency crashed below $33,000 on Monday morning for the first time since July 2021, according to CoinMarketCap's price index, marking the latest in a ...

Start your Independent Premium subscription today. The Crypto Fear and Greed Index, which analyses exchange data and online trends to assess overall market sentiment, is currently at ‘11’, marking its lowest point since last year. “The market is caught in the wider adversity of investment markets that are battling to decide where confortable levels are in the wake of interest rate hikes designed to quell soaring inflation around the Western world.”

Bitcoin fell to its lowest level since July 2021 on Monday as slumping equity markets continued to hurt cryptocurrencies, which are currently trading in ...

Nasdaq futures were down a further 2.3% on Monday. MKTS-GLOB read more Register now for FREE unlimited access to Reuters.com Register now for FREE unlimited access to Reuters.com

Cryptocurrency losses steepened over the weekend. Crypto trades 24 hours a day, including weekends. “Bitcoin has followed the lead of the equity market, ...

"But other inflation metrics are starting to slow down and the April CPI could follow suit, which in turn will likely alleviate the market's concern and help recover its risk sentiment." Bitcoin needs to maintain the key psychological level of $33,000 to prevent further deterioration of technical sentiment, Hasegawa added. Losses steepened over the weekend. Key U.S. inflation data for the month of April, due to be released Wednesday, could be a temporary "turning point" for bitcoin, according to Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. Crypto trades 24 hours a day, including weekends. "Bitcoin has followed the lead of the equity market, extending lower after a weak April," said Katie Stockton, founder of Fairlead Strategies. "Short-term momentum has deteriorated … and bitcoin is no longer oversold from a short-term perspective."

Central banks are keen to rein in inflation and have increased interest rates. Move has spooked investors who are dropping risk assets like Bitcoin.

Another worrying event is a tight job market in the U.S. showing robust employment growth. This is why Bitcoin and other crypto coins are seeing a drop in their valuation, something that we have also seen with tech stock in the past week. After its all-time high last year, Bitcoin had stayed between $35,000 - $46,000 in the past few months, Coin Desk reported. As we had reported last week, the Federal tightening of monetary policy is meant to rein in rising prices. However, trading has become an institutional affair with hedge funds and wealth managers investing in digital assets like cryptocurrencies over the years. While a sudden crash was expected, the loss in value has been relatively gradual, with the crypto coin consistently dropping value over four days.

The loss of an influential stablecoin's peg with the U.S. dollar over the weekend has prompted fear in the digital-asset market.

Bitcoin’s correlation with stocks is certainly a major factor. Cryptocurrency market analysts are looking around for where to lay the blame as Bitcoin prices plunge on Monday. Why Another, Smaller Crypto Is Partly to Blame as Bitcoin Prices Plunge to Yearly Lows