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Let’s start this weekly communication then and end the saga of the crushing of the LUNA token and its stable cryptocurrency UST. While there will certainly be legal echoes of this crisis in the coming years, the situation in the markets seems to be over.

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The government vote on the proposal to burn (completely out of circulation) 1.3 billion UST was approved by 99.4%, a decrease of 11% in the total supply. The goal is thus to reduce the sales pressure on LUNA, as the algorithm does not have a sufficient rhythm with its planned protocol. At the same time, the vote to create a new version of Terra was also accepted and this new channel was launched. The old LUNA token continues to exist and is renamed LUNC to Luna Classic. The new token acquires the name LUNA. The latter does not have a fixed stable currency.

Codenamed Phoenix-1, the Terra 2.0 mainnet went live Saturday, according to the original schedule set by Terra developers, and began producing blocks. Kwon, the founder of the project, also informed that public music services, wallets and explorers will follow the main network shortly after. According to the relaunch plan, users who previously had Terra Classic (LUC), TerraUSD Classic (USTC) and Anchor Protocol UST (aUST) will receive equal amounts of tokens at a specific, targeted time prior to the death spiral.

Condition of damage? UST continues its endless dive and is only worth 3 cents. The original LUNA token, now called LUNC, is traded for about one hundredth of a penny. Remember it was worth $ 86 exactly one month ago! The new LUNA token has become the new toy for players. About 12 hours after launch, LUNA (called LUNA2 in some markets) had lost nearly 73% of its original value, trading at $ 5.18. It had previously peaked at $ 19.54. Its current price at the time of this writing is $ 7.13. Volatility is very high.

On the legal side, the South Korean authorities have launched an investigation into the Terra accident. According to a recent report, Do Kwon Terra ignored design flaws to favor the launch of UST. The study would seek to shed light on whether there were signs of deliberate price manipulation and other problems. The Joint Southern District Prosecutor’s Office’s Financial and Stock Crime Investigation Team also summoned former employees of Terraform Labs who participated in the initial development of the Terra ecosystem in 2019. One of these employees reportedly revealed that the team was in doubt about the design of the UST stablecoin from the start. They also claim to have warned Do Kwon that the algorithmic mechanism designed to protect the asset’s tying to the US dollar could ultimately fail, but Kwon reportedly dismissed those concerns outright.

The Portuguese Congress on Wednesday rejected two bills aimed at taxing cryptocurrencies. The bills were tabled by Livre and Bloco, two left-wing parties with little representation in parliament. Portugal applies an effective zero tax rate on capital gains related to cryptocurrencies, while the capital gains tax on financial investments is currently 28%.

Important adjustment of the severity of the bitcoin network this week. In fact, networking difficulties saw a decline of 4.33% – from 31.251 billion to 29.897 billion on May 26, just two weeks after reaching a record high. As a result, it’s a little easier to spot the block for miners today than it was last week. The difficulty of mining has nevertheless more than doubled in the last year, and the network is more secure than ever.

JPMorgan has placed bitcoin’s fair price at $ 38,000, 20% higher than its current level, according to a note the bank released to customers on Wednesday. “Last month’s crypto market correction looks more like a capitulation from last January / February, and going forward we see an upside for bitcoin and the crypto markets more generally,” the memo reads. The bank’s strategist, Nikolaos Panigirtzoglou, was the lead author of this document. Crypto has overtaken real estate as the bank’s preferred “alternative asset”. She adds: “So far, there is little evidence of a drying up of VC funding. [capital-risque] after the collapse of Terra. Of the $ 25 billion in VC funding year-to-date, nearly $ 4 billion has come after Terra. Our best guess is that VC funding will continue and a long winter equivalent to 2018/2019 would be avoided. Venture capital financing would be the key to avoiding this crypto winter. “

On the Ethereum side, the Beacon chain, which will introduce proof-of-stake (PoS) to the network, has experienced a reorganization of seven blocks (reorg) Wednesday. A reorganization can occur either as a result of a malicious attack by a high-resource miner or simply as a result of a network failure that temporarily results in a duplicate version of a blockchain. On May 25, seven blocks from numbers 3,887,075 to 3,887,081 were removed from the Beacon chain. Martin Köppelmann, CEO and co-founder of Gnosis, notes that this “shows that the current node certification strategy should be reconsidered to hopefully result in a more stable chain.” There are already many suggestions in this regard. This is a simple reminder of the work that needs to be done before the official migration.

While the stock markets returned last week, the cryptocurrency market has been trying to do the same since last weekend. Bitcoin is experiencing a easing decline (emergency rally) after several weeks oversold according to the indicators. Now let’s see if it can serve as a basis for a turnaround for June after nine consecutive weeks of decline – a record in the network’s history. During this time, most have altcoins underperformed bitcoin, suggesting that speculators are still unsure of taking on additional risk. Bitcoin’s market value relative to the total market value of cryptocurrency has risen over the past three days after breaking out of a one-year downward trend on May 13th. In general is alts underperforms BTC in the bear markets due to its higher risk profile. The Bitcoin dominance index, at 46.8%, touches a level not seen since October.

If the past is any indication of the future, based on historical patterns involving bitcoin’s halving cycles, this year should show the bottom price of the current four-year cycle, as it did in 2018. In short, this is possibly the best time to enter the market if year. As an analyst at CryptoQuant mentions: “We may not be on the exact bottom of the cycle, but we are in the ranks of the BTC cycle bottoms. This is the best thing you can do when trying to predict market cycles.

In fact, if the rise was not as spectacular as others in the past for this cycle, the fall from the peak reached could also be more mixed, placing us today in a natural and attractive historical zone with changes in bitcoin prices.

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Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..

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