Wednesday, 11 May 2022

Market Summary

Market Summary 11 May 2022

Bitcoin Price: US$ 31,017.10 (+3.13%)
Ethereum Price: US$ 2,342.05 (+5.09%)


NFTs Bleed, USDD Tries for a Gauge, Sovereign Communities With a Hacktivist

  • The largest NFT collections by market capitalization are bleeding alongside the rest of the crypto market, with well-established collections tumbling over 20% in ETH terms and even more in USD terms.
  • In particular, the Azuki collection experienced significant trading activity today after its founder revealed that he was involved in 3 unsuccessful projects in the past year. Trading volume on the collection is up over 1700% today, with over 11.4k ETH traded.
  • Azuki’s founder, who goes by the pseudonym “ZAGABOND” on Twitter, admitted that he was previously involved with 3 projects: Cryptophunks, Tendies, and Cryptozunks, which their founding teams have since abandoned.
  • Members of the community interpreted the news negatively, with some notable members classifying those ventures as a rug. Holders panic-sold their Azukis, sending the price floor to 15E, a  65% decrease of the Azuki floor price from a high of 43E last month.


Michael Saylor assuages investors after market slumps hurts MSTR, BTC

  • MicroStrategy’s CEO and Bitcoin proponent Michael Saylor is confident his firm’s BTC holdings will more than cover a potential margin call on Bitcoin-backed loans.
  • The American business intelligence and software giant made headlines in 2021 with a number of major investments into Bitcoin. Saylor was a driving force behind MicroStrategy’s decision to convert its treasury reserve into BTC holdings.
  • Global markets have suffered major losses in early May and Microstrategy’s stock has not been spared. MSTR has seen its value drop by 24% and the value of Bitcoin has also slumped considerably along with the wider cryptocurrency markets.
  • This is cause for concern as the company’s subsidiary MacroStrategy took out a $205 million loan from Silvergate Bank in March 2022, with a portion of MicroStrategy’s Bitcoin used as collateral against the debt. MicroStrategy then used the proceeds to continue the firm’s BTC acquisition strategy.
  • If the price of BTC falls too low, this would trigger a margin call on the Silvergate loan due to the value of the collateralized asset dropping. It was a focal point of the company’s earnings call in May — with the company’s CFO Phone Le confirming that it would have to sell some Bitcoin if the price of BTC fell below $21,000.


US Treasury Secretary reaffirms need for stablecoin regulation following UST crash

  • United States Secretary of the Treasury Janet Yellen called on U.S. lawmakers to develop a “consistent federal framework” on stablecoins to address risks to financial stability.
  • In a Tuesday hearing of the Senate Banking Committee on the Financial Stability Oversight Council Annual Report to Congress, Yellen reiterated her previous position calling for a regulatory framework on stablecoins, citing a November report from the President’s Working Group on Financial Markets. In addition, the Treasury Secretary commented on TerraUSD (UST), the third-largest stablecoin by market capitalization, dropping to $0.67 in the last 24 hours.
  • “I think [the situation with TerraUSD] simply illustrates that this is a rapidly growing product and that there are risks to financial stability and we need a framework that’s appropriate,” said Yellen.
  • Addressing questions to Yellen, Pennsylvania Senator Pat Toomey also pointed out that UST was an algorithmic stablecoin, “not backed by cash or securities.” The Treasury Secretary added it would be “highly appropriate” to aim for a “consistent federal framework” on stablecoins by the end of 2022 given the growth of the market. She called for bipartisanship among members of Congress to enact legislation for such a framework.


10-month BTC price lows spark $1B liquidation as Bitcoin eyes $35K CME futures gap

  • Bitcoin (BTC) upended buy trends through May 10 as BTC/USD sank below $30,000 for the first time since July 2021.
  • Data from on-chain analytics firm CryptoQuant showed exchange reserves start increasing as panic gripped crypto markets.
  • After seeing a sustained downtrend, the amount of BTC on major exchanges has begun to increase again.
  • According to CryptoQuant, which tracks the balance of 21 major exchanges, sellers sent a total of 37,537 BTC to accounts from May 6 to May 9 inclusive.
  • The deposits came as BTC price action fell from $36,000 to $29,700, subsequently recovering to near $32,000 at the time of writing on May 10.
  • According to figures from on-chain monitoring resource Coinglass, Bitcoin’s fall below $30,000 triggered part of crypto market liquidations worth over $1 billion.
  • The majority of those were long positions coming from altcoins. In the 24 hours to the time of writing, BTC accounted for around $330 million of the liquidations total, with the remainder from altcoin tokens.


Terra Halt  Luna

  • The Terra chain integration on THORChain has been halted because many THORChain validators running Terra full nodes have fallen behind from sync. Trading has been halted until the majority of THORChain validators running Terra full nodes observe 100% sync.
  • (Latest)Trading and LP actions on Terra have been re-enabled as THORChain validators were able to sync nodes after a period of heightened network activity on the Terra blockchain.

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