Read in the Digest:
- Bitcoin drops to 10 month low as equities market tumbles.
- Luna Foundation Guard lends $1.5B in BTC as UST briefly loses its peg, seeing LUNA tumble.
- SEC halts $62 million investment fraud scheme from mining capital coin.
- Instagram will support Ethereum, Polygon, Solana, and Flow NFTs.
- Binance halts crypto derivatives in Spain and seeks regulatory approval.
Bitcoin Drops to 10 Month Low as Equities Market Tumbles
Driven by the historic decision made by the United States Fed on Thursday to increase interest rates, the equities market recorded its biggest decline since March 2020. The price of Bitcoin fell in tandem with the stock market.
Since Thursday, Bitcoin has lost more than 17% of its value. Bitcoin, which was priced at around $39,800 just after the announcement, hit an interday low of $32,813–its lowest value since June 2021.
The seven day price chart for Bitcoin (BTC). Source: CoinMarketCap
Since its peak price of $68,789 in November 2021, Bitcoin has lost 52% of its value. Bitcoin’s losses continue, as the world’s largest cryptocurrency has dropped by 5% over the last 24 hours to now trade at $33k as of this writing.
The bearish pressure extended to the entire crypto market, seeing Ethereum lose 15% ove the last week, while Terra (LUNA) is down by 30%. As a result, the global crypto market cap has dropped from the $1.8 trillion recorded on Thursday, to just $1.5 trillion today.
The global crypto market cap over the last seven days. Source: CoinMarketCap
- As the price of Bitcoin declines, whales appear to be shifting to other Altcoins causing Bitcoin exchange inflows to hit a 3-month high.
Luna Foundation Guard Lends $1.5B in BTC as UST Briefly Loses its Peg, Seeing LUNA Tumble
The market crash, which saw Bitcoin hit a 10-month low, also caused an unexpected twist of fate for Terra’s algorithmic stablecoin, TerraUSD (UST). On Saturday, the UST lost its 1:1 dollar peg for a brief moment.
The price of UST briefly fell to 0.987 before bouncing back to 1.0 on Sunday. In order to protect the 1:1 dollar peg of the UST, the Luna Foundation Guard (LFG) announced on Monday that it would be lending out $1.5 billion worth of bitcoin.
The LFG will loan $750 million worth of BTC to OTC trading firms as a way to help protect the UST peg. The other half (750 million UST) will be loaned out to accumulate BTC while market conditions normalize.
The token of the Terra ecosystem, LUNA, took the brunt of the news, and has lost more than 30% of its value since Thursday, May 5th. The price of LUNA fell from $87, down to as low as $58.6, and is trading at $60.17 as of this writing.
The seven day price chart for Terra (LUNA). Source: CoinMarketCap
- The Luna Foundation Guard recently became the second-largest corporate holder of Bitcoin, ammassing a total of 80,394 bitcoins in its reserves.
Why You Should Care
UST’s brief ‘de-pegging’ came after a series of major withdrawals from Anchor Protocol, a lending market that offers high yield to users who deposit UST.
SEC Halts $62 Million Investment Fraud Scheme from Mining Capital Coin
On Friday, the U.S. Securities and Exchange Commission (SEC) announced that Luiz Capuci Jr., the CEO of Mining Capital Coin MCC) had been charged for planning a fraudulent global crypto mining and trading scheme worth $62 million.
The SEC charged Luiz Capuci Jr. and Emerson Souza Pire with selling unregistered offerings and mining packages to over 65,000 investors since their operations began in January 2018.
According to the filing, MCC investors were promised 1% daily returns, paid weekly for up to 52 weeks. They were also promised payment in BTC, but were instead asked to withdraw their investments in MCC’s own token, called capital coin (CPTL).
Capuci was also charged with marketing fraudulent “trading bots”, which he claimed was an additional investment platform. The SEC alleges that MCC hoarded a minimum of $8.1 million from the sales of mining packages, and $3.2 million in initiation fees.
Why You Should Care
Regulators are enforcing stricter rules for cryptocurrencies as more cases of fraud and scams emerge in the crypto industry.
Instagram Will Support Ethereum, Polygon, Solana and Flow NFTs
In March, Meta’s CEO Mark Zuckerberg teased support for non-fungible tokens (NFTs) on Instagram, but didn’t divulge any details. It has not been confirmed that Instagram will indeed support NFTs for crypto art.
According to reports, the well-known social media platform will support NFTs from several major blockchain networks, including the Ethereum, Solana, Polygon and Flow blockchains.
The pilot program, whichcould begins as early as Monday, May 9th, will feature a small number of NFT enthusiasts from the United States. A wider roll-out will allow users to display NFTs on their profiles, link their wallets, and tag the creators of the NFT.
- One time “Ethereum Killer” Dfinity has sued Instagram creator Meta over the use of the infinity symbol logo.
Why You Should Care
The increased corporate interest shown in the metaverse and Web 3.0 could be the key to the global adoption of non-fungible tokens.
Binance Halts Crypto Derivatives in Spain and Seeks Regulatory Approval
The world’s largest cryptocurrency exchange by trade volume, Binance, has disabled its derivatives trading services in Spain as it looks to obtain a regulatory permit from the Comisión Nacional del Mercado de Valores (CNMV).
According to local newspapers, Binance has paused its derivatives offerings in a bid to comply with the rules and eligibility standards set by CNMV, the ‘National Securities Market Commission’.
La Informacion reports that Binance was asked to cease crypto derivatives trading by the CNMV (the agency responsible for regulating Spain’s securities markets), and the Bank of Spain.
The derivatives drop-down menu on Binance Spain is now missing, but remains available in the global version. Binance has been in talks for licenses from the Bank of Spain and the securities regulator since January, but has previously failed.
- Elon Musk listed Binance as one of the 18 investors to have contributed to his Twitter takeover bid.
Why You Should Care
The move aligns with Binance’s effort to operate as a fully licensed financial institution globally.