7 Big Moments From Bitcoin and Crypto’s Craziest Week Ever

Where to start? In a decade of covering cryptocurrencies I’ve seen a lot of crazy things, but never a week like that. In the past, there have certainly been one-off incidents that have changed the industry, such as the Mt. 2014 Gox, or Tesla buying $ 1.5 billion worth of Bitcoin, or Elon Musk paying Dogecoin on SNL, but never a cascade of events. as we have just seen.

In the coming days, there will be many pieces of reflection on what caused the madness. And maybe there’s some serious self-reflection on why the crypto community tolerates people who triggered much of the current mess in the first place. But for now, let’s take a breather and take stock of what the hell happened in the craziest week of cryptography. Here are seven key moments.

1. Earth burns in flames: Until a week ago, Earth was the hottest thing in cryptography: its government token LUNA was a top 10 currency by market capitalization, and its algorithmic stablecoin linked to the UST dollar was stablecoin number 4. And then, pop! Both were close to zero. (LUNA is trading at a fraction of a penny, while UST has hit rock bottom at 13 cents.) Before Earth, many projects collapsed, but never one so big and never so spectacular. The world of cryptography will talk about this disaster for years to come, and autopsying why so many in the industry have rushed to rely on Earth’s high-risk structure.

2. $ 200 billion worth of cryptocurrency was vaporized in 24 hours: That’s from a Bloomberg history on Thursday, which followed previous reports that cryptocurrencies had already lost more than $ 1 trillion. before the crack-up of Earth. To put this in perspective, $ 200 billion is more than that total market capitalization Bitcoin in 2020. If you want to turn the carnage upside down, you can see that much of the collapse has been driven by macroeconomic forces (not just cryptocurrency this month) and that the cryptocurrency market is now big enough to survive a loss. of that magnitude. But still. $ 200 billion!

3. Currency collapse: On Thursday, Coinbase (COIN) shares hit the bottom at $ 40.83, a 90% drop from its $ 381 release price in April last year. This is the flagship company of the cryptographic industry and, unlike many technology companies, has been profitable for most of its existence. The Coinbase spiral, which was underway long before this week’s market crash, mainly reflects that Wall Street still doesn’t know how to value cryptography. (On Friday, shares began to rise to about $ 70).

4. Secretary Yellen says there is no systemic risk: This news has been buried amid market madness, but it’s a big issue that the Secretary of the Treasury told Congress this week that cryptography poses no “systemic risk” to the U.S. economy as a whole. The term “systemic” is a technical term and would have subjected the industry to a number of new punitive regulations.

5. Tether breaks the money: Stable currencies are assumed to be stable. This week he questioned the whole concept. Tether (USDT), the largest stablecoin by far, fell briefly to 95 cents before recovering. Tether has broken its plug in the past, but in the midst of Earth’s debacle, its last slip was a terrible moment, and it will only increase the scrutiny of Tether’s opaque accounting practices.

6. SBF takes a piece of Robinhood: FTX CEO Sam Bankman-Fried has revealed that he has taken an 8% position in HOOD, which could portend a full acquisition. If that happens, it would be an ironic twist for Robinhood, who was previously seen as a Silicon Valley sweetheart and a serious rival to Coinbase. Now its growth has slowed, it is cutting 9% of its workforce and stocks are down 70% in a year.

7. Musk says “maybe not” on Twitter: It wouldn’t be a crazy week in crypto without some of Elon’s pranks. Indeed, Tesla’s CEO began on Friday by suggesting that he might not buy Twitter after all; the stock reacted badly. He later clarified that he is “still committed” to buying Twitter, but what happens next is any guesswork. Twitter is the industry’s most important communication platform and Musk its biggest influencer, so it all matters.

Those were just seven moments of news in a week full of many more of them, including an imminent breach by El Salvador thanks to the mismanagement of the country’s Bitcoin president. Crypto has made its roller coaster ride the craziest so far, and my biggest conclusion is that most of the industry will be fine. WAGMI, as they say. Unless you’re an Earth bag carrier.

That is Roberts in Crypto, a weekend column by Decrypt editor-in-chief Daniel Roberts and Decrypt executive editor Jeff John Roberts. Sign up for the Decrypt Debrief newsletter to receive it in your inbox every Saturday. And read last weekend’s column: Bitcoin’s bloodbath will get worse. That’s fine.

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