Monday, 23 May 2022

Market Summary

Market Summary 23 May 2022

Bitcoin Price: US$ 30,293.94 (+2.88%)
Ethereum Price: US$ 2,043.19 (+3.45%) 

 

Revenge Of The Greenback

  • It should come as no a surprise that the Dollar Index (DXY) appears in our Market Insights report once again; dollar strength has been one of the most important macro factors driving asset prices over the last 6 months, alongside inflation and geopolitical uncertainties (to name a few).
  • Aside from the last 7 days (during which the DXY has decided to take a breather), it has been truly “UpOnly” for the greenback. DXY was 95 when the 2022 calendar year began. It has since risen to roughly 103, notching an 8.5% gain YTD. This move has also been the fastest YoY change in many years, leading to the DXY breaking out of its 7 year range.
  • This DXY strength has been a consistent drag to risk asset performances over this same time period, as discussed in our previous market notes.
  • “The last week has seen the S&P500 index lose key psychological and structural support around 4000. If the macro backdrop continues to worsen, the pre-COVID market highs become increasingly more likely.” From last week’s Market Insights, Crypto Hell Week.
  • The following week has not been any kinder to the equity markets, either. After a slight reprieve, the S&P500 is attempting to make new lows on the year. At the time of writing, the index has officially moved into bear market territory, defined as a 20% drawdown from prior all time highs.
  • This risk off move has been driven largely by the macroeconomic factors discussed in our previous reports. Further weakening economic data such as GDP contractions and continued hot inflation prints have added fervor to the seller’s market as well.
  • If the S&P500 Index fails to define support in the 3800 level that is currently being tested, a move towards previous structural support becomes more probable, specifically around the 3250-3400 levels.

 

Bitcoin ends week ‘on the edge’ as S&P 500 officially enters bear market

  • Bitcoin (BTC) struggled to recover its latest losses on May 21 after Wall Street trading provided zero respite.
  • Data from Cointelegraph Markets Pro and TradingView showed BTC/USD trading dipping below $28,700 into the weekend, subsequently adding around $500.
  • Down 4.7% from the previous day’s $30,700 highs, the pair looked firmly rangebound at the time of writing after United States stocks indexes saw a volatile final trading day of the week.
  • The S&P 500, managing to reverse after initially falling at the open, nonetheless confirmed bear market tendencies, trading at 20% below its highs from last year.
  • “Another wacky day in the stock market. Dow Jones -500 early in the day, then recovers it all and closes +8,” popular Twitter account Blockchain Backers commented about broader U.S. market performance:
  • “Bitcoin still just teetering on the edge.”

 

Blockchain, crypto set to take sports industry beyond NFT collectibles

  • Bitcoin (BTC) has been attributed as the most prominent blockchain use case, showing the technology’s prowess in successfully delivering an immutable and truly decentralized ledger over the past 13 years. Adding to the years of innovations since then— that saw the introduction of altcoins, nonfungible tokens (NFT), decentralized finance (DeFi) and more, a study conducted by fintech giant Deloitte highlighted the untapped potential of the crypto ecosystem to open up newer markets for the sports industry.
  • Fan tokens and NFTs were first introduced to the sports industry to increase fan engagement via collectibles and voting mechanisms. However, Deloitte, one of the Big 4 accounting firms, envisions the industry further embracing crypto and blockchain technology over the coming years:
  • “A nexus will form around sports collectibles, ticketing, betting, and gaming. We are just beginning to see its [cryptocurrency’s] potential, as well as the new markets it could lead to.”
  • Highlighting incoming trends in the sports industry, Deloitte’s 2022 sports industry outlook report expects an eventual rise in blockchain-enabled innovations, as a result of which “The use of NFTs, crypto, fan tokens, and ticket innovations will grow and evolve.”

 

OpenSea launches Seaport ​​marketplace protocol allowing NFT bartering

  • Nonfungible token (NFT) marketplace OpenSea has announced the launch of a Web3 marketplace protocol for “safely and efficiently buying and selling NFTs.”
  • In a Friday blog post, OpenSea said the marketplace protocol, dubbed Seaport, will give users the option to obtain NFTs by offering assets other than just payment tokens like Ether (ETH). According to the platform, a user “can agree to supply a number of ETH / ERC20 / ERC721 / ERC1155 items” in exchange for an NFT, implying bartering a combination of tokens as a method of payment.
  • In addition, Seaport users can specify which criteria such as certain traits on NFT artwork or pieces part of a collection they want when making offers. The platform will also support tipping, as long as the amount does not exceed that of the original offer.
  • “OpenSea does not control or operate the Seaport protocol — we will be just one, among many, building on top of this shared protocol,” said the NFT marketplace. “As adoption grows and developers create new evolving use-cases, we are all responsible for keeping each other safe.”

 

Crypto Biz: Amid crypto carnage, Goldman and Barclays fill their bags, May 12-18, 2022

  • Amid Terra’s death spiral, Bitcoin (BTC) recording seven-consecutive weekly red candles, over $1 trillion in lost market cap across the ecosystem and an aggressive Federal Reserve hell-bent on reversing the chaos it created, major banks are quietly increasing their exposure to the sector. You’re going to love this: Goldman Sachs — once the most passionate Bitcoin detractors — and Barclays are doing some strategic buying as they prepare for the future of crypto trading. 

 

Panama’s president says he won’t sign crypto bill into law ’at this moment’

  • Laurentino Cortizo, the president of Panama, has said he won’t sign off on a crypto bill recently approved by the country’s National Assembly without additional Anti-Money Laundering rules.
  • Speaking at the Bloomberg New Economy Gateway Latin America conference on Wednesday, Cortizo said the bill recently passed by Panama’s legislature must go through legal checks before reaching his desk, but added he needed more information before potentially signing it into law. Describing the legislation as an “innovative law” and a “good law,” the president said he approved of certain aspects of the bill but hinted at possible illicit uses of cryptocurrencies that needed to be addressed.
  • “I will not sign that law at this moment,” said Cortizo. “If the law has clauses related to money laundering activities — Anti-Money Laundering activities — that’s very important for us.”
  • Panama’s “Crypto Law” passed in the National Assembly following the third debate on April 28. According to the legislative body, the bill was aimed at regulating “the trading and use of crypto assets, the issuance of digital value, the tokenization of precious metals and other assets, payment systems and other provisions.” 

 

Terra’s amended revival plan would decrease the allocation for post-attack UST holders

  • After a grueling two weeks for the Terra community, the team behind the project announced revisions to their proposed revival plan for Terra (LUNA) and TerraUSD (UST). 
  • In a Tweet, Terra shared three major revisions to the proposed Terra revival and redistribution plan. These include increasing the genesis liquidity, introducing a new liquidity profile for pre-attack LUNA holders and decreasing the distribution to post-attack UST holders.
  • The announcement noted that pre-attack Anchor UST (aUST) holders, post-attack LUNA holders and post-attack UST holders’ initial liquidity parameters are modified. The change will be from 15% to 30%, and according to Terra, this may “mitigate future inflationary pressures” and increase the token’s supply during the launch.
  • Apart from this, wallets that hold less than 10,000 LUNA will get the same liquidity as the aforementioned groups. Moreover, 70% of their LUNA will be vested in over two years, with a cliff of six months. Terra said it believes that this new liquidity profile will ensure that small token holders will have similar initial liquidity.
  • Lastly, the allocation for post-attack UST holders decreased from 20% to 15%. According to Terra, this “dpeg related allocation is on par with the original stakeholder (pre-attack $LUNA) allocation.” The 5% will be moved to the community pool.

 

WEF 2022: Blockchain and digitization to take center stage at Davos

  • The annual meeting of the World Economic Forum (WEF) is scheduled to take place from May 22–26,  marking the first in-person WEF global leadership event since the pandemic began.
  • The annual meeting was first scheduled for January but was later turned into a virtual event in light of growing COVID-19 infections during the winter.
  • The Davos Agenda 2022 virtual event, which took place from January 17–21, 2022, saw major world leaders appeal for cooperation in tackling major global socioeconomic issues. Discussions during the virtual event revolved around global economic recovery, climate action, technological innovation and global collaboration.
  • A total of 300 world leaders are expected to attend the meeting along with hundreds of businesses and policymakers. Among the 300 governmental representatives, more than 50 leaders of state and government are expected to convey their vision for the globe. Over 1,250 private sector leaders, as well as nearly 100 Global Innovators and Technology Pioneers — the world’s most promising tech and business start-ups — will be in attendance.
  • The emphasis is on developing impact tactics, establishing new frontiers, predicting plausible future economic scenarios and delivering ambitious answers to the world’s most pressing problems. The World Economic Forum has stepped up its impact activities in the last two years, addressing everything from COVID-19 and climate change to education, technology and energy governance

 

Cardano accelerator program Genius X ISPO nets $105 million in ADA

  • Cardano-based accelerator program Genius X has seen more than $105 million worth of ADA delegated to its initial stake pool offering (ISPO).
  • This comes after the firm’s decentralized automated market maker and liquidity management protocol Genius Yield completed its ISPO on May 10, with over 14,500 delegators staking 270 million Cardano (ADA) across four official stake pools, making it one of the biggest ISPOs within the Cardano ecosystem.
  • Genius Yield is a Cardano-based decentralized finance (DeFi) protocol that features a decentralized exchange with an order book. It integrates a liquidity provision model, which aims to mitigate market risk and eliminate impermanent loss.

 

erra Prop 1273: BURN and REMEDY Fee with each LUNA Transaction

  • Terra Proposal 1273 seeks to implement a 3% burn tax on each buy and sell transaction of LUNA. According to the proposer, due to high trading volumes of over $3B in the last 24 hours, around 300B LUNA would have been burned if the tax had been implemented.

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