Crypto Morning: Avalanche (AVAX) melts 14%, Solana (SOL) 9% and Ethereum (ETH) collapses nearly 7%

Charlie Taylor

The global macroeconomic scenario and the distribution of the new version of the LUNA token focus the attention of cryptocurrency investors this Thursday (26). Bitcoin (BTC) is trading down 2.1% over the past 24 hours at $29,224, according to data from CoinGecko. Ethereum (ETH) is down 6.8% at $1,842. In Brazil, Bitcoin retreats 2%, to R$141,343.59, according to the Bitcoin Portal Index (IPB). “It is possible that we will have this movement until the end of the month, because market sentiment is still uncertain. If BTC loses the support of the 29 thousand dollars, the region it is in, we can see a sharper drop to the 25 thousand dollars region”, evaluates Eduardo Andrade, trader of the Bitcoin Market, in an article by E-Investidor. Major altcoins are reporting losses in the last 24 hours such as Binance Coin (-6.1%), XRP (-2.9%), Cardano (-5.4%), Solana (-9.6%), Dogecoin (- 2.7%), Polkadot (-6.7%), Avalanche (-14%) and Shiba Inu (-5.5%), show data from CoinGecko. US futures indexes point to an opening in the red, while Asian stocks reacted to comments by Chinese Premier Li Keqiang. He said that, in some areas, the performance of the Chinese economy has been worse than before the pandemic and that measures are needed to combat rising unemployment. Despite the caution in the futures market, US stocks closed in positive territory on Wednesday. The minutes of the Federal Reserve’s May 3-4 meeting confirmed that the central bank intends to make two 0.5 percentage point increases at upcoming meetings to curb inflation. However, the Fed signaled that, with monetary tightening accelerating, it “is well positioned” to make adjustments throughout the year if the bitter medicine takes effect.

New land

The proposal for a new version of the Terra blockchain and the LUNA cryptocurrency was approved on Wednesday (25), with 65.5% of votes among the cryptocurrency investor community. The level of abstention was high and represented 20.98% of the vote. In the new versions to be released this Friday (27), both the Terra blockchain and its LUNA token will keep the original names. On that day, the old network is renamed “Terra Classic”, and the previous token, “Luna Classic”, identified by the symbol LUNC. The TerraUSD (UST) algorithmic stablecoin will not be included in this new blockchain, but will continue to exist on the market, albeit without the development of Terraform Labs.

Distribution

This Thursday, the new LUNA will be distributed to investors of the old token and UST. Some exchanges already announce plans to list the token, as is the case with Huobi, according to Bloomberg. Binance said it is working with the Terra team to provide impacted users with “the best possible treatment”. Following the collapse of TerraUSD, whales – investors with large volumes of cryptocurrencies – have been flocking to stablecoin USD Coin (USDC), the second largest by market cap after Tether (USDT), data from CoinMetrics shows. “In the current market condition, many people see USDC as the preferred and safest stablecoin,” Edward Moya, senior analyst at trading platform Oanda, said in an interview with CoinDesk. In a letter to the Fed, USD Coin issuer Circle Internet Financial said it does not see a need for a digital dollar as its stablecoin already meets “many of the potential benefits” of a central bank digital currency (CBDC).

Regulators tighten the siege

Media reports from South Korea indicate that regulators will tighten the siege against the country’s cryptocurrency exchanges, which have traded the equivalent of $2.5 billion worth of tokens in just the last 24 hours. In testimony prepared for a hearing on Thursday at the House Financial Services Committee, Fed Vice Chair Lael Brainard also defended the need for greater regulation, according to Bloomberg. “The recent turmoil in cryptocurrency financial markets makes it clear that the actions we take now – whether on regulatory framework or digital dollar – must be robust for the future evolution of the financial system,” Brainard said.

Other highlights

The co-founder of EthereumGavin Wood, said at the World Economic Forum in Davos that cryptocurrency investors need to be more aware of what’s behind their investments after the bloodletting that wiped out more than $800 billion from the market, as per Reuters.

Andreessen-Horowitz (a16z) raised $4.5 billion for a fourth cryptocurrency fund, the company’s largest so far, in a bet on the sector despite the recent turmoil. Of the total raised by “Crypto Fund 4”, a volume of US$ 1.5 billion will be invested in initial projects (“seed”) and US$ 3 billion in venture capital. With the new fund, the total raised by a16z in crypto/web3 already amounts to more than US$ 7.6 billion, the company’s announcement details.

Babel Finance, based in Hong Kong, raised $80 million in a new funding round that valued the bank and crypto asset manager at $2 billion, according to Reuters. Investors participating in the Series B round include Jeneration Capital, Circle Ventures and 10T Holdings, along with existing Dragonfly Capital and BAI Capital.

Ripio cryptocurrency exchange announced the premium Ripio Select platform for customers who have at least $5,000 in their account, according to Valor. With the new service, customers will have a greater range of cryptocurrencies and the right to an exclusive relationship manager with communication channels.

Elon Musk will need to raise more capital to fund its $44 billion purchase of Twitter after letting a $6.25 billion line of credit secured by its shares in automaker Tesla expire, the Financial Times reported.

Regulation, Cybersecurity and CBDCs

Appointed as court administrator, the law firm Zveiter Advogados began registering GAS Consultoria creditors on its website, led by Glaidson Acácio dos Santos, the “Pharaoh of Bitcoin”. The estimate is that there are 300,000 creditors, most of them investors affected by the company’s lack of payments, according to a report in the EXTRA newspaper.

The IRS reaffirmed the understanding that trades between cryptocurrency pairs can also be taxed, even when they are not converted to reais. The decision was published in the Tuesday edition (24) of the Federal Official Gazette.

In Portugal, lawmakers on Wednesday rejected two proposals by minority parties for the taxation of bitcoin and other cryptocurrencies submitted to the Budget and Finance Commission, according to the ECO portal. Earlier this month, Portugal’s finance minister signaled that the country is willing to tax cryptocurrencies, although he did not give a deadline for the measure.

The Chamber of Deputies of Paraguay approved on Wednesday (25) a bill that regulates the commercialization and production of cryptocurrencies in the country, which includes the creation of norms for Bitcoin mining in the region.

In the US, a united government could facilitate passage of new cryptocurrency laws and “follow the spirit of (Joe) Biden’s executive order” to keep the country at the forefront of innovation, Morgan Stanley said in a report released Wednesday by CoinDesk.

Wall Street is already united. Exchanges and other financial firms are against a proposal under review by US regulators to allow retail investors to trade crypto derivatives directly on the FTX platform, Bloomberg reported.

Cryptocurrency companies must remain a focus for agencies fighting financial crimes in the US, officials from the Justice Department and the Commodity Futures Trading Commission said at an event held in New York on Wednesday, according to the Wall Street Journal.

in Kazakhstan, Binance plans to help the government craft rules for the cryptocurrency market, according to information on the exchange’s blog. The government wants to expand the market beyond Bitcoin mining and make the country a regional blockchain hub.

Metaverse, Games and NFTs

From a series of tweets, the crypto community began to speculate in recent days that Nike, owner of the startup RTFKT (read artifact), plans to launch a collection of NFT footwear in partnership with the French brand Louis Vuitton, according to Valor. Bernard Pedra, crypto specialist in the Bitcoin Market research area, highlights that, between May 27th and 31st, Louis Vuitton will have an exhibition in New York with 47 editions of the Air Force 1 sneaker, by the late designer Virgil Abloh. A Nike NFT developed by artist Takashi Murakami was purchased by a user named AliSajwani for $134,000, according to the New York Times.

A partnership between the TuneTraders platform and the composers of Troop de Hitz and 608 will transform great hits of country music into an investment opportunity, according to Exame. The project uses blockchain technology to distribute royalties and allow fans and investors to profit from songs by Maiara and Maraisa, Zé Neto and Cristiano, among others.

the São Paulo announced on Wednesday night that it has already started accepting cryptocurrencies as payment for ticket sales for members of its partner-fan program, a partnership with the brokerage Bitso, which sponsors the São Paulo team, according to Exame.

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