Argentina shuts down crypto to get a loan. UST runs into major turbulence. Despite being in a bear market, my conviction on developing a long-term mindset strengthens. My name is Ben. This is your nightly crypto news wrap-up.
Let’s get it! Just a few months ago, the headlines surrounding the Argentina crypto narrative were bullish for the big picture. Their native currency was failing due to surging 20-year high inflation. So the citizens of Argentina saw Bitcoin as a solution to keep their purchasing power above water. Unfortunately for the people, their government was neck-deep in debt and owed the International Monetary Fund, or the IMF, $39 billion. Last Thursday, Argentina’s central bank released a statement that bans their financial institutions from offering any crypto-related services.
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Central bank statement reads, “The measure ordered by the Board of Directors of the BCRA seeks to mitigate the risks associated with operations with these assets that could be generated for users of financial services and the financial system as a whole.” What they really mean in layman’s terms is that they are strong-arming their citizens into using a failed currency because if they put their money in Bitcoin instead of a 50% inflated peso, their problems would worsen. What a load of baloney! It’s a shame because days before that, the two largest private banks in Argentina announced that they would let their customers buy Bitcoin, Ethereum and other crypto assets.
What a coincidence. So much for Argentina’s crypto adoption momentum. The Terra LUNA foundation and their community faced some serious adversity as a consequent of Bitcoin’s latest plunge below support levels. The sudden drop in the price of Bitcoin caused the market to panic. As a result, Terra stablecoin UST depegged from the dollar due to the unexpected outflow of liquidity. cryptoslate.com reports, “The algorithmic stablecoin saw increased sell pressure on May 7 as more than $300 million in UST was sold via Curve Finance.”
As of now, the UST is valued at 98¢, and it’s fallen 200 basis points. Luna Foundation Guard are taking serious measures to protect the peg of their stablecoin. To defend the peg, the LFG had to issue $1.5 billion worth of Bitcoin they purchased at $47K for $33,000 per Bitcoin. In a series of tweets from the LFG in order to proactively defend the stability of UST, they stated they would loan $750 million worth of BTC to OTC trading firms to help protect the peg and they would loan $750 million in UST to accumulate Bitcoin as market conditions normalize. That’s one way to spend $1.5 billion. As a result of the stablecoin’s price drop, swapping UST on Curve Finance has been limited to BTC trading pairs. Swissborg has suspended UST withdrawals due to maintenance for exchanges for UST as well as adding a risk warning to UST calling the asset “volatile”. Hopefully, Do Kwon and the gang get this under control before they lose their hard-earned credibility.
Let’s jump in and do a little market watch here as today has been not such a good day for crypto. Bitcoin coming in at $30,336 Down 10% on the day, 21% on the week Ethereum coming in at $2,250 Down 10% on the day, 21% on the week Guys, let’s go ahead and take a look at our top losers. Terra LUNA down 47% on the day Lido DAO down 27% on the day Amp down 22% on the day ApeCoin down 22% on the day GMT down 20% Absolutely insane, guys! It’s a red day in the markets, guys! I can’t say this came as a surprise. We have been keeping a lookout for this, you know, on my channel and on the morning stream for BitBoy Crypto. We were expecting this downward price action, for sure. How low can we go? We are getting very close to those summer lows at about $28K/$29K, so we’ll have to see what happens.
Now, I want a minute to get real with everyone. These times when things go blood-in-the-streets bearish, well, they’re here right now, aren’t they? These are the moments that will define you as an investor. Despite BTC being at a 10-month low, and that will probably get much worse, there are still positive things to focus on for the big picture. More countries and people are adopting crypto. Cash App has brought 10 million new users to crypto. Cardano whales are buying. NFTs are coming to Facebook and Instagram. The metaverse is coming. And every top celebrity has their foot in the door. The night is darkest before the dawn, and when it all turns around, you’ll be grateful you took a long-term approach and dollar-cost averaged in during the bear market.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/z67POfHsO70
