Wednesday, 25 May 2022

Market Summary

Market Summary 25 May 2022

Bitcoin Price: US$ 29,654.58 (+1.87%)
Ethereum Price: US$ 1,979.41 (+0.31%) 

 

Fear Strikes Crypto, Lord of Badgers, & BTC Accumulation

  • The Crypto Fear & Greed Index is derived from analyzing emotions and sentiments from the markets using Volatility, Market Momentum/Volume, Social Media, Token Dominance, and Trends.
  • Crypto investors are shrouded in fear as BTC continues to trade downwards alongside bearish macro sentiments. BTC is currently testing the $28-30K region that is acting as strong support, and if it resolves lower, we might likely head into the $22-24K region.
  • The Fear & Greed Index has hit 8 points out of 100, the lowest seen since March 2020. This could be a bottom indicator as markets tend to bounce more often than not after reaching ‘Extreme Fear’ levels.
  • Markets seem to remain cautious on key events this week, namely FOMC’s minute’s release on Thursday and PCE Price Index release on Friday.

 

Low inflation or bust: Analysts say the Fed has no choice but to continue raising rates

  • As economic conditions continue to worsen, financial experts worldwide are increasingly placing the blame at the feet of the United States Federal Reserve after the central bank was slow to respond to rising inflation early on.
  • Much of the recent turmoil again comes back to the Fed, which has embarked on a mission to raise interest rates in an attempt to get inflation under control, financial markets be damned. 
  • Unfortunately for investors looking for short-term relief, economist Alex Krüger thinks that “The Fed will not stop tightening unless markets break (far from that) or inflation drops considerably and for *many* months.”
  • According to Krüger, the Fed will “need to see Y/Y [year-over-year] inflation drop 0.25%–0.33% on average every month until September” to meet its goal of bringing down inflation to the 4.3%–3.7% range by the end of the year.
  • Should the Fed fail to meet its PCE inflation target by September, Krüger warned about the possibility that the Fed could initiate “more hikes *than what’s priced in*” and also begin exploring the sale of mortgage-backed securities as part of a quantitative tightening campaign.
  • The Fed’s responsibility for the current market conditions was also touched on by billionaire investor and hedge fund manager Bill Ackman, who suggested that “The only way to stop today’s raging inflation is with aggressive monetary tightening or with a collapse in the economy.”

 

Weak stocks and declining DeFi use continue to weigh on Ethereum price

  • The worsening market conditions were also reflected in digital asset investment products. According to the latest edition of CoinShare’s weekly Digital Asset Fund Flows report, crypto funds and investment products saw a $141 million outflow during the week ending on May 20. In this instance, Bitcoin (BTC) was the investors’ focus after experiencing a $154 weekly net redemption.
  • Regulatory uncertainty weighed on investor sentiment after an updated version of the Russian mining law proposal came to light on May 20. The document in the lower chamber of the Russian parliament no longer contained the obligation for a crypto mining operators registry nor the one-year tax amnesty. As cited by local media, the legal department of the Duma stated that these measures could “possibly incur costs on the federal budget.”
  • Additional pressure on Ether price came from the Nasdaq Composite Index’s 2.5% downturn on May 24. In addition, the heavily-tech stock-driven indicator was pressured after social media platform Snap (SNAP) tumbled 40%, citing rising inflation, supply chain constraints and labor disruptions. Consequently, Meta Platforms (FB) shares fell by 10%
  • The network’s most active decentralized applications saw a substantial reduction in users. For instance, Uniswap (UNI) V3 weekly addresses decreased by 24%, while Curve (CRV) faced 52% fewer users.

 

WEF 2022: Web3 no longer just about crypto and DeFi, says Polkadot founder Gavin Wood

  • Although Web3 has become a sort of buzzword in the cryptocurrency community, its application and utility extend far beyond the world of blockchain, according to Polkadot (DOT) founder Gavin Wood. 
  • In an exclusive interview with Cointelegraph at the World Economic Forum’s Annual Meeting in Davos, Switzerland, Wood talked about Web3 applications and whether the all-encompassing concept needed to evolve past its current usage. “I don’t think Web3 needs to evolve, really, from its origins too much yet but maybe in the future, it will,” he said before explaining the merits of the technology:
  • “The key takeaway is the freedom from the need to trust. I don’t want to hope or have blind faith that the service I’m using is operating correctly or dealing with my data correctly and not being hacked.”
  • Wood also explained the advantages of Web3 being thrust into the limelight as a concept that refers to the next stage of the internet’s evolution:
  • “The rise of the term Web3 is encouraging because it means that people are seeing this underlying technology feed into different applications — the ones they didn’t necessarily expect […] It’s no longer about Bitcoin, it’s no longer about crypto, it’s no longer about smart contracts just, it’s no longer about DeFi. It’s like we are starting to understand that this is a broad platform for building new kinds of services [that] Web2 just couldn’t.”

 

Mercado Bitcoin partners with Stellar to create MVP for Brazilian CBDC

  • Brazilian exchange Mercado Bitcoin announced its partnership with the Stellar Development Foundation (SDF) on Tuesday. The company said it intends to develop one of the nine projects selected for the LIFT Challenge Real Digital, promoted by the Central Bank of Brazil.
  • The LIFT Challenge Real Digital is a collaborative environment carried out by the Central Bank of Brazil (Bacen), in partnership with the National Federation of Associations of Central Bank Servers (Fenasbac). With the announcement of Stellar’s integration, SDF will join the consortium created by Mercado Bitcoin to develop solutions for Real Digital and which also has CPQD and ClearSale.
  • CEO of Stellar Development Denelle Dixon said that Stellar’s network is prepared to support Mercado Bitcoin and the Central Bank of Brazil as they explore use cases for the Real Digital’s future. “Stellar was designed for asset issuance, and its built-in compliance tools give Mercado Bitcoin a strong foundation to develop a solution with the features that Bacen expects to see,” she claimed.
  • According to the statement, Mercado Bitcoin selected the Stellar network due to the speed, efficiency and security of the protocol.

 

Enabling Cross-Shard Communication At Harmony

  • With its shard-based approach, Harmony impeccably handles millions of transactions every day. But as we scale for millions of users and wallets, we have equipped ourselves to become one of the first sharded blockchains to accomplish cross-shard messaging. With an effective cross-shard messaging protocol and a fully-meshed design, shards will be able to undergo seamless communication with each other. With the team actively working towards the goal, users and developers can expect a cross-shard messaging protocol at Harmony later this year.
  • For builders and developers on Harmony, this is a major breakthrough as they can build by collating features and using data that reside on different shards. Alongside, inter-shard data consistency is vital. These two pursuits shall dictate the sustainability of this limitless scalability.

 

Coinbase offers ‘thousands of tokens’ in expanded swap service

  • America’s largest crypto exchange Coinbase has added the BNB Chain, formerly Binance Smart Chain, and Avalanche to the Coinbase Wallet’s list of supported networks where users can swap and store cryptocurrencies.
  • The Tuesday blog post from the exchange boasts that the added functionality will provide access to “thousands of tokens,” which constitute a “greater variety than most traditional centralized exchanges can offer.”
  • The added functionality to BNB Chain and Avalanche brings the total supported networks up to four, including Ethereum and Polygon. Users of the wallet who wish to trade on-chain can use Coinbase’s own in-app decentralized exchange (DEX) on four networks. Token bridging is not yet available.
  • Coinbase Wallet allows users to self-custody their crypto and provides access to on-chain as opposed to the features available on Coinbase’s centralized platform.
  • Coinbase currently has only 173 tokens listed on its exchange. These numbers pale in comparison to the thousands available across the four networks Coinbase Wallet users now have access to. The exchange stated that in the coming months, “we’ll be making it possible to conduct swaps on an even greater variety of networks:”
  • “Not only will trading expand, but we’re also planning to add support for network bridging, allowing you to seamlessly move tokens across multiple networks.”

 

Terra Prop 1273: BURN and REMEDY Fee with each LUNA Transaction has been rejected.

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