Bitcoin plunged on friday as a major stock sell-off in the U.S. spooked the cryptocurrency market. Around $129 billion of value was wiped off the cryptocurrency market in a 24-hour period.
An absolutely bad day for stocks. NASDAQ, Dow, and S&P all landed firmly in the red. The Dow is not far off from its intraday low.
According to George, Host of CryptosRUs youtube channel, Bitcoin wasn’t the only one to take a hit following the Fed’s announcement. All the Gains of Thursday stock rally were erased on Friday as well.
The analyst highlighted in detail the biggest crash and its consequences on traders.
The Dow Jones industrial average lost 1,012 points, down 3.0%; the S&P 500 fell 3.5%, and the Nasdaq composite fell 4.7%.
Earlier it was predicted that May will be a good month for Bitcoin but the entire market is a plummet all because of the recent Fed decision this week which negatively impacted the cryptocurrency, especially as its price movement has correlated with the stock market recently.
The Market is Diving Low with a Fear of Inflation:
Nasdaq makes a steep dive on Thursday as the recession phantom haunts investors after the BoE’s quarter-point hike which was widely expected by the market, but the center’s banks updated the forecast for annual inflation to rise above 10 percent this year and the economy may contract later this year which has already spooked the investors.
The analyst pointed out the recent hike in the interest rate by 50 basis points by the Fed. This has led to its continued approach to policy tightening to tackle soaring inflation that has notched to 40-year highs.
Though Fed foresees that an ongoing increase in the target range will be appropriate for all the investors in the long term. This would be the Fed’s biggest hike in over two decades, showcasing its aggressive approach to tame mounting inflation.
Countries like Germany are facing inflation and so is the entire of Europe because the DXY is going up as again the DXY is made up of the u.s dollar versus the British pound versus the euro versus the yen and they’re all collapsing right.
“The rising fear of inflation is also due to the ongoing war and the and supply chain issues and china yet again suffering from another covid and a lot of Europe is suffering from disruptions from ukraine of course russia whereas Russia is also threatening cut off oil and the list is long and a lot of stuff is happening around right now which is scaring the bejesus out of everyone. “
The massive sell-off has begun amidst the crisis
There is an enormous amount of sell pressure in the market right now and it is driving towards lower for people who have invested for a long term or leverage in general.
That’s the reason behind the deep selloff in stocks on Thursday—the tech-heavy Nasdaq Composite dived nearly 5% by midday—has caused digital assets to reverse course, and worse. Bitcoin’s rapid plummet brings it far below its level earlier this week to the lowest point in months.
George said this is the major sell-off since March this year, in Bitcoin which kicked off during the U.S. market open, potentially forecasting a market participant which continues to sell every bullish rally.
Will the Crypto Market Revive – and When?
It’s the question on everyone’s lips at the moment.
Will the crypto market bounce back or not, when and is it a good time to stick or twist? Over the course of last year’s trend, Bitcoin has seen its value surge 255.65% – even when you take into account the crypto crashes of 19 May and 8 June.
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Jed McCaleb Still Holds 250 Million XRP In His Tacostand Wallet
According to XRPscan, Jed McCaleb, the co-founder of Ripple Labs and its first chief technology officer, has started selling huge sums of XRP on the crypto market after suspending sales in September last year.
He has escalated his selling by around 140% in the last three days, and a crypto enthusiast expects he will be done selling altogether within a month. Jed currently owns over 250 million XRP in his “tacostand” wallet.
9 Million XRP Sold Everyday
According to statistics released by the XRPscan portal, Jed McCaleb resumed selling the last of his massive XRP hoard as the year began.
He has dumped over 464.8 million XRP since January, which is equivalent to $186,790,421 at today’s market rate.
The amount of XRP coins sold each week varies, ranging from 18 million to 26 million and 42 million. As Twitter user Rafael Ken Aguilar pointed out, he has boosted his selling volume by around 140 percent in the last three days, selling nearly nine million XRP every day, up from four to six million per day previously.
If the current selling rate holds, McCaleb expects he will be out of XRP in about a month.
Jed Still Holds 250 million XRP
According to XRPscan, Jed’s wallet, “tacostand,” still has 249,200,734 XRP in it. The XRP community developed a website to track McCaleb’s sales rate, which shows a somewhat higher figure: 257,858,264 tokens.
Hence, this is the last of the nine billion XRP granted to McCaleb by Ripple’s top management when he decided to move away from the firm a year after it was formed to start as a competitor to the blockchain Stellar.
Depending on how much XRP McCaleb sells per week, two probable dates for McCaleb to run out of XRP are listed here: July 14 and August 8.
According to CoinMarketCap, the sixth largest cryptocurrency, XRP, is trading at $0.404 as of this writing, down by 70.0% in the last 24 hours.
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Traders Withdraw $10M Tether USDT, Yet The Firm Claims To Be Strong
A few days ago, the global cryptocurrency market had just entered a recovery phase but that didn’t last long as the market is once again overshadowed by the bearish momentum today.
The recent updates state that as rumors of surging regulatory scrutiny for stablecoins continues grows, crypto traders withdrew about $10 billion from Tether USDT in the previous two weeks.
As per the data USDT’s circulating supply has plunged from 11th May’s $84.2 billion to $73.3 billion yesterday, on 23rd May.
On-chain data suggests that traders withdrew $1 billion from Tether on May 20 alone. Terra cryptocurrency UST and LUNA crash fuelled the enormous outflow. USDT, like numerous other stablecoins, lost its peg following the UST meltdown. This attracted a lot of attention towards stablecoin and its stability.
In a recent blog post, Tether claims that the de-pegging of USDT across crypto exchanges does not imply that the peg has been broken; rather, the de-peg demonstrates that the liquidity has gained more demand than that of exchange’s order books.
Tether USDT Claims To Have 1:1 Backing
Previously, Tether had said that USDT has a one-to-one dollar bank account backing, however later clarified that it utilizes various assets as collateral, including commercial paper and even digital tokens. This was disclosed after it reached a settlement with New York authorities.
As part of the settlement, the company must declare its reserves every quarter. According to the most recent attestation report, it has decreased its commercial paper holdings while boosting its holdings of US Treasury notes. The firm also announced that it is currently carrying foreign government debt.
Although the majority of the assets in the review are stable, “corporate bonds, funds, and precious metals” and “other investments (including digital tokens)” account for roughly 11% of the total.
On the whole, as per the reports the firm’s reserves have surpassed the amount that is required to regain the digital tokens that were issued.
Tether’s account, however, reveals it has $162 million more in reserves than its tokens, according to Patrick McKenzie, a fintech analyst. However, due to the negative character of the crypto market, some of its investments, such as those in the Celsius network, are doing poorly.
According to Paolo Ardoino, Tether’s chief technology officer, Tether’s stability has been maintained even through multiple black swan events and many highly volatile market conditions. And adds up saying, even in the darkest days, Tether has never failed to keep up with its recovery request that comes through any of its verified customers.
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278 Million LUNA Gets Burnt With The Released Address, Do Kwon Says It’s Pointless!
Do Kwon, the now-famous Terra CEO and founder, published on Twitter on May 21 a dead wallet address where people may send their LUNA tokens to be burned. The uploaded wallet was filled with nearly 280 million LUNA tokens, making the tweet one of Do Kwon’s most popular.
With 2,719 transactions, the total amount of LUNA transferred to the burning address has reached 289 million, meaning that the average number of tokens sent to burn every transaction is roughly 107,000.
There was yet another round of foolishness in this narrative. On May 23, two days after the burning address was published, Do Kwon indicated that sending LUNA to that address is pointless and will result in token loss.
From the moment the wallet’s address was originally disclosed, 254 million LUNA were sent to the wallet and after the tweet exposed the useless idea, there were 25 million LUNA transferred.
Terra Isn’t A Ponzi Scheme
Recently, there was a statement from Pennsylvania Senator Pat Toomey that Terra may be a fraudulent project. Of course, Toomey is not alone. Terra was a classic pyramid scam, according to prominent hedge fund manager Bill Ackman, who warned that such fraudulent ventures represent a threat to the whole cryptocurrency ecosystem.
After the failing blockchain project was linked to the famed biotech fraud Theranos, FTX CEO Sam Bankman-Fried remarked that Terra wasn’t a Ponzi scheme. He stated that this project was basically driven by “mass excitement.”
Meanwhile, South Korean officials have allegedly tried to seize the assets of Terra’s non-profit organization, Luna Foundation Guard, accusing Terra of theft. Almost all of the LFG’s money were spent on failed attempts to assist the TerraUSD (UST) stablecoin to reclaim its peg.
At the time of reporting, Terra (LUNA) is trading at $0.0001633 and TerraUSD at $0.067
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Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
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