Good morning. Here's what happened:
Prices: Bitcoin and other major cryptocurrencies are moving sideways.
Insights: After the Terra implosion, the environment for crypto trading in South Korea could change. Here's what could happen.
Technician's take: BTC has shown no signs of life, but volatile price movement is likely.
PricesBitcoin
(BTC): $29.612 -0.05%
.Ether (ETH): $1,945 -1.5%
Biggest winners
There are no winners today in CoinDesk 20.Biggest losers
.| Asset | Ticker | Income | DACS Sector |
|---|---|---|---|
| Chain link | LINK | -4.0% | Data Processing |
| Cosmos | ATOM | -3.7% | Smart contracts platform |
| Solana | SOL | -3.5% | Smart contracts platform |
Bitcoin is moving sideways
Bitcoin and other major cryptocurrencies moved sideways for the second day in a row.
The largest cryptocurrency by market cap last traded at around $29,700, up slightly and roughly in line with where it was 24 and 48 hours earlier. Ether, the second largest cryptocurrency by market cap, fell more than a percentage point and was still trading a little below the $2,000 level it has held for most of this week. Other cryptocurrencies were mixed, with some rising a bit and others falling, although Metaverse tokens MANA and SAND had a good day, with SAND rising over 7% at one point. TRX also rose more than 5% recently.
A number of crypto market analysts say bitcoin will remain in the $28,500 to $30,500 range it has held since stablecoin TerraUSD (UST) collapsed two weeks ago until investors have clarity on how the current uncertain environment of high inflation and weakening economic indicators will resolve. According to the minutes of their last meeting released on Wednesday, Federal Reserve officials indicated that they would need to raise interest rates by 0.5% in each of the next two meetings. The Fed had raised rates by the same percentage on May 4, but continued to face criticism for not taking tougher monetary action sooner to rein in rising prices.
Stocks outperformed in recent months: The tech-heavy Nasdaq rose 1.5%, while the S&P 500 and Dow Jones Industrial Average gained more moderately. Cryptocurrencies and stocks suffered as investors shied away from riskier assets. Gold and 10-year government bond yields fell.
Brent crude oil, a measure of prices in the energy market, traded above $111 a barrel, and with the U.S. summer travel season approaching, demand for oil is expected to be strong.
In an interview with CoinDesk TV's First Mover program on Wednesday, Michael Sonnenshein, CEO of crypto asset manager Grayscale Investments, a subsidiary of CoinDesk parent company Digital Currency Group, noted the "selling pressure" and volatility in digital assets, but also pointed out that the same trends have infected other asset classes.
"Whether it's tech, crypto or anything else, I can't imagine there are many things that have been spared from this recent setback," Sonnenshein said. "There have also been events like Terra that have led to additional selling pressure."
However, Sonnenshein added optimistically,
"Inthe short term, we will bounce back. "
MarketsS&P500
: 3,978 +0.9%
DJIA: 32,120 +0.6%
Nasdaq: 11,434 +1.5%
Gold: $1,853 -0.7%InsightThetrading environment
in South Korea may be changing
.The implosion of Terra's U.S. dollar-linked stablecoin terraUSD (UST) could change the frenzied crypto trading market in South Korea as regulators pay more attention to the situation, according to two founders of prominent crypto organizations.
The country, a stronghold of trading, could tighten listing restrictions and make it harder for foreign tokens to list on Korean exchanges, which could discourage projects from even trying.
"There are a few elements that could be affected, especially in listing," Doo Wan Nam, a South Korean who leads growth at MakerDAO and is the founder of crypto venture fund StableNode, told CoinDesk.
UST lost its peg earlier this month when investors sold it for lack of sufficient liquidity for other U.S. dollar-linked stablecoins, including Tether (USDT), causing UST's price to drop as low as 7 cents. The Luna token (LUNA), which underpins the Terra ecosystem, lost 99.7% of its value after UST's failure, and Terra-based decentralized financial applications (DeFi) lost more than $28 billion in locked value.
In the days following the implosion, suicide help wanted ads flooded Terra-centric community forums. At the center of the drama is Terraform Labs, the Singapore-based company behind Terra, and its Korean founder Do Kwon. Kwon is notorious for responding to critics with condescension and even calling for the death of other stablecoin projects.
According to local reports, regulators may tighten licensing rules for crypto exchanges in the country to protect ordinary investors from a Terra-like iteration. However, this could lead to restrictions on how coins are listed and offered to local investors.
Doo pointed to the possible introduction of "safeguards for exchanges" to ensure they meet certain requirements, including "white papers and regular disclosures (updates) of listed coins," adding, "We're not sure if they will implement this, but if so, it would burden both Korean exchanges and listed coins."
Decentralized, finance-focused tokens from foreign companies could have a hard time gaining a foothold in the Korean market. "Many foreign coins, especially DeFi, could have a hard time listing on Korean exchanges because compliance would be difficult to enforce," Doo said.
Korea remains one of the largest crypto trading regions in the world. In the last 24 hours alone, $2.5 billion worth of tokens were traded on Korean exchanges.
Meanwhile, some market observers say small traders in Korea - known for their aggressive futures and altcoin trading - may be refraining from trading risky assets.
"Considering what is happening, degens might become more cautious in their stance toward conservative assets," Alexander Tkachenko, founder of commodity-based token platform VNX, told CoinDesk.
"Regulated crypto products, as well as stablecoins backed by real assets like gold, could benefit. "
Technician's takeBitcoinStabilizes
in Tight Range; Support at $27K, Resistance at $30K-$35K
.Bitcoin (BTC) is in a consolidation phase characterized by a tight price range with low trading volume. So far, the cryptocurrency has struggled to make a decisive move above the $30,000 level, which is near the top of its recent trading range.
BTC is up 3% over the past 24 hours, and momentum has improved over the past week. This means that buyers could remain active above the $27,500 support level.
The sharp downward move on May 12 towards $25,300 occurred on high volume, which could be a sign of capitulation, albeit less severe than the last sell-off.
Despite the scope for a price recovery, the upside potential seems limited due to the negative momentum readings on the weekly and monthly charts.
KeyEventsWorld Economic Forum
Conference on blockchain and sustainable economic growth.
9:30am HKT/SGT(1:30am UTC): Australia private investment spending (Q1)
CoinDeskTVIn
case you missed it, here is the latest episode of "First Mover" on CoinDesk TV
:Grayscale's Sonnenshein on crypto ETFs; Is JPMorgan bullish on bitcoin? The Sandbox in the Metaverse
As investors wait for Bitcoin's next price move, Michael Sonnenshein, CEO of CoinDesk sister company Grayscale Investments, joined "First Mover" to talk about crypto markets and the launch of his company's first European ETF. Alex McDougall of Stablecorp shared his analysis of the Terra LUNA and UST failures. We also continued the conversation on the metaverse as Mathieu Nouzareth, CEO of The Sandbox, shared his views on this emerging space.
HeadlinesGuggenheimsMinerd
says bitcoin will fall to $8K. We checked his record: A quick review of some of the well-known analyst's key predictions shows how mixed his track record is.
Crypto Whales Ditched Tether for USDC After Stablecoin Panic: The UST outage caused major investors on the Ethereum blockchain to abandon USDT in favor of the perceived safety of its biggest competitor.
Jae Kwon Returns to "NewTendermint" to Fight for Cosmos' Soul: Ignite, which was rebranded from Tendermint in February, will split into two entities: Ignite and NewTendermint.
Definition of cryptocurrency regulation important for industry growth: Morgan Stanley Disagreement over new legislation would be negative and lead to a prolonged period of uncertainty, the bank said.
Terra Snapshot is expected this week. Here's how "new" Luna will be distributed: The supply of tokens on the new blockchain will be just over 116 million, developers said.
Longer ReadingThere
WasNo Terra 'Attack': Conspiracy theories won't save you from financial reality, says CoinDesk's Chief Insights Columnist.
Today's crypto explainer: what can you buy with bitcoin?
Other Voices: Cryptocrash: "I got arrested for knocking on the door of Luna's boss" (BBC)
Said and Heard
"The metaverse will be trippy and hallucinogenic at times. We can live our best, ideal lives in a body-like avatar and quickly return to our real lives without changing locations. We can parachute in and out of this world in seconds, seamlessly incorporating multiple different realities into the natural rhythm of our lives." (Janet Yorio, CEO of Everyrealm, and Zach Hungate, Director of Gaming, for CoinDesk) ... "The cost of flights is soaring ahead of summer: Airfares rose 18.6% between March and April, according to the latest Consumer Price Index data. Year-over-year, airfares are up 33.3% on an unadjusted basis. Common strategies such as waiting for prices to fall, switching to another airline or redeeming frequent flyer miles may not be enough to lower the cost of travel, according to industry analysts. Travelers who haven't yet purchased their tickets face a difficult choice: pay higher fares, find other ways to save on their trips, or stay closer to home." (The Wall Street Journal) ... "There are eerie parallels between the predatory lending to blacks during the housing bubble and its impact on our community and today's situation where black celebrities are pushing cryptocurrencies on blacks. We know the outcome. (Academy Award Winner Travon Free)