cryptonews

Despite the widespread market turbulence of 2021, the prospect of Bitcoin (BTC) falling from its all-time high of $69,044.27 on November 10th last year to less than $29,000 just six months later – but this was before the worrying prospect of a ‘crypto winter’ began to rear its head.

The latest crash to befall Bitcoin was actually prompted by the collapse of another cryptocurrency, Terra (LUNA), which lost virtually all of its value when Terra’s stablecoin, UST, lost its dollar peg.

Today, BTC/USD is down by 57% from its November all-time high, but is this proof that we’re in the midst of a crypto winter? Or could a recovery still take place in the short term?

As the chart above shows, Bitcoin has tumbled so far that the asset has been left to fight resistance at $30,000, underlining the magnitude of the coin’s decline since November 2021. Other major coins like Ethereum are also some 60% adrift from their November highs.

Although Terra’s collapse has accelerated the downturn, we can see that the downward trend surrounding the crypto market has been ongoing for some months now. So why is such a long-term decline taking place? 

In a nutshell, the downturn has been brought on by a significant shift in investor sentiment toward coins like BTC, ETH, and particularly meme coins like DOGE as record-breaking inflation has entered the markets.

As the rate of inflation soars beyond 8% throughout many economies across the world, investors have increasingly shied away from riskier assets like cryptocurrencies in favor of more safe haven stocks and commodities that are less prone to volatility – such as gold, for instance.

“If we compare the situation from summer 2021 when [B]itcoin grew on inflation expectations and was to some extent a temporary digital alternative to gold, and the current situation, one important difference is worth highlighting – on the 15th of March the Fed started the process of raising rates and ending QE,” said Maxim Manturov, head of investment advice at Freedom Finance Europe, quelling the notion that BTC could once again be regarded as a digital safe haven investment.

“This has been the fundamental reason for all [B]itcoin and cryptocurrency growth in the last two years. And with higher rates, an asset class like cryptocurrency may be less attractive.”

Bitcoin’s Struggle To Become a Safe Haven

Despite Manturov’s suggestion that BTC’s bull run was influenced largely by temporarily favorable market conditions, cryptocurrency enthusiasts will argue that the likes of Bitcoin should outperform the market when downturns occur.

Theoretically, Bitcoin’s decentralized blockchain framework means that the cryptocurrency, like other crypto assets, should be immune from stock market downturns and other external influences linked directly to economies throughout nations and continents alike. After all, a coin that has no physical location shouldn’t be impacted by a rise in US inflation rates.

However, 2022 has shown us that this is fundamentally untrue at the present time. This is because investors generally sell their crypto assets at early signs of wider market trouble. Notably, the 2020 global stock market crash during the emergence of the COVID-19 pandemic also saw BTC fall by 57% in a matter of days.

This is understandable, and it’s largely down to bitcoin’s decentralized nature that such considerable volatility occurs. Because of the distributed digital ledger that BTC is built on, there’s such a lack of central concerns for the currency that its performance is driven heavily by sentiment. So when wider market sentiment declines, it can snowball into an avalanche of crypto sell-offs as intent cools.

Are We Facing a Crypto Winter?

So, how long will the current downturn last? Whilst it’s very difficult to anticipate cryptocurrency price movements, the cyclical nature of Bitcoin means that the periods between the coin’s pre-programmed halving events can naturally fall into a ‘winter’ in which the prices of coins stagnate with very few upward trends.

Bitcoin’s most recent halving event – which cuts the volume of BTC awarded to miners by 50%, thus increasing its scarcity – occurred in May 2020. Following the coin’s 2016 halving a similar pattern occurred whereby the asset rallied for 12 months before giving way to a prolonged period of stagnation.

Notably, Bitcoin’s next halving event is set to occur in 2024, with some experts already stating that they don’t expect another bull run to take place for another two years at least.

Although the prospect of a crypto winter may seem like a bad thing for investors, it can improve the overall health of the industry, with developers having time to be less focused on short-term profits and more intent on developing better projects to incorporate decentralized finance and blockchains for greater functionality in the future.

Of course, it’s important to note that massive institutional interest in crypto may mean that Bitcoin’s cycles bring less volatility over time. Furthermore, an upturn in global markets and the lowering of inflation rates over the remainder of 2022 may yet bring an upturn in the fortunes of the crypto landscape.

The unpredictability of the cryptocurrency ecosystem is one of the reasons why investors have drawn so many profits from it in the past. It also means that the forecasting of a crypto winter can be a tricky prediction to manage. Either way, investors shouldn’t be perturbed by what’s set to be a promising future for the crypto market.

Since August of last year, OpenSea has been routinely producing billions of dollars’ worth of transaction volume each month, making it the most successful marketplace in the whole NFT industry.

However, the transaction volume of OpenSea based on Ethereum in May was $2.596 billion, which is a fall of approximately 25% from April’s value, and the number of monthly active users was 422,300, which is a decrease of around 11% from April’s flow rate.

According to Dune, OpenSea snapped a decreasing trend in transaction volume by recording a 40% percent month-over-month increase in trading volume in April. During the same month, approximately $3.5 billion worth of Ethereum NFT deals were completed.

The non-fungible token market as a whole is moving away from the manner in which it was historically controlled by Ethereum. Traders are now more equally distributed across many alternative-chain markets, and the average number of user transactions is growing while costs are decreasing.

Magic Eden Tops OpenSea’s Transaction Volumes

Meanwhile, Magic Eden, a Solana-based NFT marketplace, has surpassed OpenSea in the total daily trading volume. At the time of writing, the cryptocurrency market tracker DappRadar reports that Magic Eden has had over 376,000 daily NFT transactions, whilst OpenSea has seen approximately 72,000 transactions.

In addition, the data from DappRadar reveals that Magic Eden has executed NFT transactions at a far greater pace than OpenSea. Despite this, the marketplace situated in Solana has reported lower sales metrics owing to the scarcity of blue-chip NFTs.

Following the announcement from Dubai and Abu Dhabi’s regulatory authorities that govern virtual assets and cryptocurrencies, crypto players from across the globe have launched in the vibrant and fast-growing Middle East crypto market.

This has made the Middle East one of the fastest growing crypto markets in the world, making up 7% of the global trading volumes, according to ChainAnalysis. A recent survey has also shown that 33% of UAE residents say they have invested in crypto.

In addition, data from YouGov shows that 67% of UAE consumers have an interest in investing in crypto in the next five years.

However, the ecosystem will need to overcome several challenges before it can build on the interest displayed by consumers in the region.

The most staggering hurdle that will need to be addressed is the friction with on-ramping into the crypto ecosystem. Fortunately, “Open Banking” can reduce this level of friction and subsequently increase the adoption of crypto.

Firstly, Open Banking will enable a seamless experience for crypto investors by combining open banking protocols with industry-standard APIs. With this coupling, consumers would only need to provide authentication only once in their crypto journey.

Secondly, Open Banking removes the need for traditional payment rails such as manual bank transfers or card payments. There is normally a latency associated with this process and higher fees for the user.

Next, using Open Banking APIs, a customer will be able to easily speed up the activation process and comply with regulatory requirements.

Lastly, crypto adoption will add to the ease of payments. The underlying blockchain technology will enable smoother verification, as well as cross-validate customer accounts a lot easier.

Geneva, Switzerland, 5th June, 2022, Chainwire

TRON-based USDD has joined the league of global crypto titans, surpassing several significant milestones in less than one month since its May 5 launch.

The blockchain industry’s most distinctive trait is constantly evolving and transforming traditional sectors rapidly, bringing revolutionary technologies to the world and financial markets worldwide.

USDD has continued to build since its launch, solidifying organic growth, and aspiring to advance the Stablecoin 3.0 era to make finance accessible to all. With a total circulating supply of nearly 700 million, the TRON-based USDD has recently upgraded itself to the first over-collateralized decentralized stablecoin (OCDS), offering faster transactions with the highest collateral ratio around the globe.

As one of the most secure decentralized stablecoins, USDD enjoys a guaranteed collateral ratio of at least 130%, higher than the 120% set by DAI, which is considered a paragon of the industry. The real-time collateral ratio of USDD is published on the TRON DAO Reserve’s website, publicly available 24/7.

While allowing the TRON DAO Reserve members to continue minting USDD by burning TRX, the upgrade consolidates USDD’s stability and credibility by over-collateralizing assets under the TRON DAO Reserve (TDR). These reserve assets would include BTC, TRX, and multiple stablecoins like USDC, USDT, TUSD, and USDJ, at a ratio of 130% to back the issuance of USDD. In other words, every USDD is supported by at least $1.3 worth of BTC, TRX, stablecoins, and potentially other highly liquid assets.

The TRON DAO Reserve is currently holding 10,500 BTC, 240 million USDT, and 1.9 billion TRX in the reserve account, on top of the 8.29 billion TRX already in the burning contract. The real-time collateral ratio is now over 200% – a total $1.37 billion of assets backing the 667 million USDD in circulation.

“Spearheading the Stablecoin 3.0 era, the upgraded, over-collateralized USDD will add more diversified features to underpin its stability,” said H.E. Justin Sun, Founder of TRON. “The $10 billion reserves pledged by the TDR will enable USDD to become the most reliable decentralized stablecoin with the highest collateral ratio in blockchain history. Currently, the 200%+ collateral ratio offers USDD a very strong safety net.”

To power the over-collateralization of USDD, the TDR has greatly increased its reserves, including the highly liquid BTC, TRX, and USDT, to back USDD’s total supply. Users worldwide can access the information by querying on-chain contracts at any time, and the collateral ratio is transparently maintained.

Stablecoins are the faucet of the blockchain industry, and it’s critical to ensure their security, transparency, efficiency, affordability, and scale, all of which criteria make USDD a highly desirable option. This upgrade has strengthened USDD, adding an extra layer of security to the token’s stability and risk tolerance in a way similar to how Maker powers DAI.

The DAI token, supported by Maker, is one of the oldest and most resilient stablecoins in the DeFi field. Its success is an excellent example of the decentralization of stablecoins. USDD runs on TRON, one of the largest stablecoin networks. Millions of TRON users, as well as those leveraging the BTTC cross-chain solution, are experiencing the complete decentralization of stablecoins, which in turn shows how blockchain technology practically reaches the masses.

So far, USDD has been circulating on TRON, Ethereum, and BNB Chain. It’s also embraced by numerous popular platforms, including SUN.io, Uniswap, PancakeSwap, Curve, Ellipsis, KyberSwap, Poloniex, Huobi Global, KuCoin, Gate.io, and Bybit. Industry leaders such as Alameda Research, Amber Group, Poloniex, Ankr, Mirana, Multichain, FalconX, and TPS Capital have already joined the TDR membership as a whitelisted institution, with more names soon to be announced.

In addition, behind the TRON blockchain, thrives a vibrant community led by the TRON DAO, one of the largest DAOs in the world. As of June 2022, TRON has registered over 96 million user accounts, over $55 billion worth of assets stored on-chain, and an average daily transaction value of $10 billion across the network.

In the near future, the TRON-based USDD will quickly embrace additional ecosystems and major applications. USDD will lead the way into a new era for stablecoins as it grows in supply and user adoption, ushering in the next stage of decentralization across the blockchain industry worldwide.

About TRON DAO

TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized Web3 services boasting over 100 million monthly active users. The TRON network has gained incredible traction in recent years. As of June 2022, it has over 96 million total user accounts on the blockchain, more than 3.2 billion total transactions, and over $12.3 billion in total value locked (TVL), as reported on TRONSCAN. In addition, TRON hosts the largest circulating supply of USD Tether stablecoin (USDT) across the globe, overtaking USDT on Ethereum since April 2021. TRON is also currently the third largest blockchain hosting the USD Coin (USDC) created by Circle. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. Most recently, the over-collateralized decentralized stablecoin USDD was launched on the TRON blockchain, backed by the first-ever crypto reserve for the blockchain industry, the TRON DAO Reserve, marking TRON’s official entry into decentralized stablecoins.

TRONNetwork | TRONDAO | Twitter | YouTube | Telegram | Discord | Reddit | GitHub | Medium | Forum

Contacts

• Feroz Lakhani
• press@tron.network

Cryptocurrency investigators are still scratching their heads trying to figure out what led to the demise of UST and LUNA last May.

Analytics from Nansen recently pointed out that lending platform Celsius could be one of the contributors that led to the collapse of TerraUSD. Celsius, on the other hand, does not agree with these speculations.

This scrapes open the issue of transparency in the DeFi industry. In this industry, it can be very difficult to understand where money is going or how easy it is to trigger a currency meltdown. This is why regulators are so concerned about the impact of DeFi on investors and the financial system in general.

The Anchor Protocol was a very popular service for TerraUSD holders, but a big lump of investors withdrew their money from Anchor in May. It is still unclear why this happened, but some theories have popped up.

One of these theories argues that Celsius was one of the first to withdraw its funds from Anchor, which led to a broader selloff on the platform.

Celsius stated that the only reason it removed its funds from the platform was that its management group spotted “changes in the stability.” The company also made sure to mention that it did not benefit from the resulting instability in any way.

Companies like Celsius accept deposits from customers and then lends that money to other users, which it then charges a fee. Celsius offers users returns of about 14%. This means Avalanche’s 19.5% yields were very attractive.

The crypto market saw a huge crash in May and, even now, remains in a bear market. This could be very intimidating for new and aspiring crypto investors, but there is a “crypto blueprint” investors can follow to make things a bit easier.

Even before investing one’s money, it is important to acknowledge the fact that there is almost no protection for crypto investors. One thing to watch out for is what’s called a pump and dump, where scammers encourage people to buy a token, causing its value to rise, and then the scammers sell out, causing the price to plummet.

If an investor then decides to invest in crypto, it could be simpler to use the more popular exchanges like CoinBase, Binance, or FTX. Once the account is ready to go, it is easy to transfer money into it from the user’s bank.

When it comes to what percentage of the portfolio should consist of crypto, it is very difficult to tell as there is not enough data to determine this yet. The best thing to do is to keep the user’s exposure low.

Another important factor to take into consideration is that the user has to pay taxes on their crypto. However, they do not have to report crypto on their tax returns if they did not sell or exchange it for another type of crypto.

If an investor is still hesitant about fully investing in cryptocurrencies, there are ways to learn about crypto without investing in a currency. Some options include buying shares in crypto companies, getting a job in crypto, or just simply buying tokens to experiment with.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.

Since the last week of May, the STEPN native tokens (GST/GMT) and in-game assets have seen massive dumps.  

The prices for NFT Sneakers also dropped over the last few days. Sneakers that cost 13 to 15 SOL a month ago are now worth around 4 to 5 SOL.

At the moment, STEPN (GMT) is number 1 in CoinMarketCap’s trending list and is worth $0.9633 after a 4.66% drop in price over the last 24 hours.

When looking at the longer time periods, STEPN saw a 3.82% increase in price over the last week, but a 63.59% drop over the last month.

STEPN’s bad luck started with its announcement that it will officially be banned in China in the upcoming months. STEPN users were also urged to handle all their in-app assets before June 15, 2022.

Things only went downwards from there as GMT tokens moved from the app to exchanges to get sold, and huge amounts of sneakers also got sold on the app. Many people started selling their tokens and assets because of fear induced by STEPN’s announcement.

Even after this, many people in the crypto industry believe STEPN’s time is not over yet.

The main reason for this is because this occasion is not the first time that China has decided to ban crypto. Every time this happened in the past, the crypto prices still eventually found their way back to the top. Many people believe the same applies to STEPN.

Another reason why STEPN might still be in the game is because of all the future updates that are around the corner for the project, such as the ability to lend and borrow sneakers in the game.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.