Bitcoin fluctuates, the market continues to experience the Terra (LUNA) and UST collapse, the digital euro is being worked on in the EU, and major Russian officials talk about the inevitability of crypto legalization. CoinsPaid Media has prepared for you a selection of the most significant market events that happened from May 14 to 20.
Bitcoin (BTC) Is Highly Volatile
Over the past week, the situation in the cryptocurrency market hasn’t undergone any major adjustments. Bitcoin is still demonstrating quite high volatility — its price fluctuated in the range of $2,500. So, if at the end of last Saturday, May 14, the first cryptocurrency dipped to $28,700, then by the end of Sunday, the quotes were tending to $31,300. Such “swings” were observed throughout the week. Finally, by Friday morning, May 20, Bitcoin was slightly above $30,000.
Therefore, BTC quotes held almost the same positions as a week ago — the decrease in value was about 3%, which is not substantial given such volatility.
The main factors putting pressure on the market remain unchanged:
- the global economic downturn;
- the increase in inflation and consumer prices;
- international relations crisis;
- new COVID-19 outbreaks.
In general, there is little reason for optimism, and global financial markets are reacting to this by falling, and the cryptocurrency market follows in their wake.
The Terra (LUNA) Case
The situation around the Terra crypto project keeps evolving. Earlier this week, Terraform Labs co-founder Do Kwon proposed a hard fork, which planned to create a new network with no ties to the UST stablecoin. Most members of the Terra community rejected the idea. No specific steps to restore the project have been taken yet.
The Luna Foundation Guard (LFG) turned out to have spent almost all its assets trying to save UST — the total amount of financial contributions was about $3 billion. However, these attempts led to nothing, and UST is now trading at 8 cents, while LUNA is worth a hundredth of a cent.
The South Korean authorities reconstituted an interdepartmental group known as the Grim Reapers to investigate the Terra collapse. The country’s Internal Revenue Service has demanded $78 million from Terraform Labs. Several lawsuits have already been filed or are being prepared against Do Kwon. Amid this news, it has become known that the legal team at Terraform Labs resigned almost the entire staff.
Forbes called the UST and LUNA collapse the “fifth reset” of the crypto market, comparing the situation to the bankruptcy of Mt.Gox, The DAO attack, the ICO bubble, and the crypto market crash of March 2020.
There is some good news, though. The project continues to function, the community representatives are looking for ways out of the situation, and the total trading volume of LUNA during the last 24 hours was almost $950 million. The Terra ecosystem developers were supported by the BNB Chain community, offering to transfer or create new decentralized apps on Binance. It was also announced that GAM Holding AG, a Swiss investment company, is considering allocating $2 billion to $3 billion to save theTerra blockchain. Anyway, we’ll keep an eye on further developments.
Stablecoin Volume Drops
The capitalization of all stablecoins has dropped by a total of $8.4 billion amidst ongoing events. According to experts at Glassnode, this is the largest decline in history. The monetary value of all stablecoins is now about $162.7 billion.
The Digital Euro Is Already Working
The European Central Bank (ECB) may release the digital euro by 2026, ECB Executive Board member Fabio Panetta announced during a National College of Ireland speech. He said preparations for the launch of the digital euro will be completed by 2023, after which the EU countries will have another three years to test the CBDC before its full integration into the financial system.
Crypto Legalization in Russia
Cryptocurrency in Russia will definitely be legalized. This is reported by TASS, citing the statement of the Minister of Industry and Trade Denis Manturov. The official noted that the Central Bank and the government actively discussed the issue. However, specific dates haven’t been named yet. “Everyone tends to understand that sooner or later this will be implemented, in some format or other,” he said.
Note that this is not all the crypto news over the past week, but only a cursory overview of the most high-profile newsbreaks. More updates can be found on our website and social networks daily!