The internet enters conspiracy mode as LUNA goes into freefall below $1, April CPI puts up a 40-year all-time high, and the SEC’s chair, dirty Gary Gensler, accuses crypto exchanges of trading against their users. And this is your crypto news wrap-up.
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Let’s get it! I would note that there was a report just this morning in the Wall Street Journal that a stablecoin known as TerraUSD experienced a run and had declined in value. And I think that 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. As a result of UST losing its peg to the dollar, LUNA’s founder, Do Kwon, has been taking emergency measures and promises his project to return to form. But so far, it’s not going to plan. Not even a little bit.
The LUNA Foundation was forced to sell their entire Bitcoin holdings, which consisted of well over 70,000 Bitcoin. The price of LUNA itself hovered around $80 just a few days ago. Unfortunately, earlier this morning, the price went into a freefall and crashed down below $1 to about 74¢. Despite suffering the most gut-wrenching dump of the ages, Terra states that they’re not going anywhere and they’re here to stay. Yet I beg the question, what is behind the brutal breakdown? Rumors are circulating the internet stating that Janet Yellen hired Citadel to break the peg. Some are even saying BlackRock is involved too. Regardless of who the culprit truly is, one thing is clear. The Fed just released a report that shows interest in creating a US CBDC. And this example of UST losing its footing is their ground to stand on. Like Bitcoin analyst Dennis Porter states, “Mark my words. The UST failure will be used as evidence by policymakers to regulate stablecoins to death and champion CBDCs. This is not good.” Not looking good at all. Is there anything good about the markets today?
Let’s go ahead and do a little market watch here. We’ve got Bitcoin coming in at $28,906. Down about 7% for the day Down 27% on the week Ethereum coming in at $2,081 Down 11% on the day and 30% on the week Let’s go ahead and check our top losers as there are quite a few of them, guys. Terra LUNA down 93% on the day, 98% on the week! Absolute insanity! Fantom down 42% on the day Gala down 40% on the day eCash down 40% on the day The Graph down 37% on the day ApeCoin down 36% on the day And Harmony down 35% on the day Guys, blood is in the streets. I have a couple of shorts going absolutely nuts right now. I am expecting a bounce to come in at some point. We can’t go down forever without a little relief bounce. It will happen. The question is when.
The consumer price index numbers from April were released this morning. And it’s clear that the Fed still has a long road ahead of them. Higher than expected, the CPI marked an 8.3 gain from April last year. Just shy of its all-time high from four years ago. Since March saw an 8.5% rise, April’s 8.3% rise is what they’re calling the first “cooling” in months. Although energy prices declined 2.7% with gas dropping 6.1%, Charles Schwab strategist Kathy Jones stated, “We’re starting to see energy pull back a bit, but it’s not enough. The markets were hoping for a better number, and it’s not enough to rule out more Fed tightening.” The Fed still has five meetings left this year. And the next one begins on June 14. We already know they plan on hiking the interest rates at every meeting here on out. But with ongoing supply chain issues, little reassurance with inflation, and with the House passing a $40 billion bill to aid Ukraine, it’s hard to think the hawkish approach won’t continue moving forward. Dirty Gary Gensler is at it again. The guy has no chill. If you’re new to the channel, he’s the bald guy who runs the SEC, and he wants to make your life trading crypto a living hell. First of all, he’s doing anything and everything he can to delay his inevitable loss of the XRP lawsuit.
That’s a whole story in itself. But instead of taking the L and staying in his place, he doubles down and continues to be the voice of government overreach. He recently told Bloomberg that all entities trading crypto fall under the regulator’s scope and, therefore, need to register with it. Not only is he saying that crypto exchanges are evading rules, he’s literally accusing crypto exchanges of trading against their users. His exact quote is “In fact, they are trading against their customers often because they’re market-marking against their customers.” If you’re going to make a claim like that, you need real evidence to back it up. With this, of course, he took another shot at the big three stablecoins, USDT, USDC and BUSD, criticizing each one of the three big ones were founded by the trading platforms to facilitate trading on those platforms and potentially avoid AML and KYC. You know they’re coming after stablecoins, and they’re going to use what happened to LUNA’s UST to do it. It’s completely unfair to cite what happened with UST as an example because none of the big three are algorithmic stablecoins.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/njWB5NXNndg