What Are the Latest Crypto Market News?Henry Fisher
This week’s roundup covers what’s new in the crypto world. Bitcoin (BTC) prices plunged more than 20% in May, Tether (USDT) lost its peg to the U.S. dollar, Shiba Inu (SHIB) is bottom fishing, and Ethereum’s software upgrade might happen sooner than we thought. In addition, we look at how Bitcoin and Ethereum are recovering from the bear market.
Bitcoin (BTC) Prices
In the last five months, Bitcoin (BTC) prices have trended downward, and the median move in May is a little under 4%. This is because financial conditions continue to tighten, and investors have become warier of the cryptocurrency. While it is not a safe asset, a price decline does not mean it’s inherently unstable.
While there is some correlation between Bitcoin prices and broad market movements, it is not an exact correlation. Bitcoin is not a hedge against equity markets, and the currency’s short-term value is unclear. Risk assets experience significant market volatility, including stock markets, commodities, and high-yield bonds. Despite its reputation as a store of value,
The cryptocurrency hit a new high in November 2013 and reached almost $10,000. However, it fell sharply from that high in weeks, hitting $6,800 in a single day. By the end of the year, it was trading for only $4,826. Bitcoin prices are currently hovering around $8,500. In the meantime, the cryptocurrency has seen more than 20% of its value fall in the last five months.
While Bitcoin prices are on the brink of a crash again, there is still hope. In fact, despite the recent dip, it has rebounded from losses before, and the cryptocurrency market is showing signs of recovery. The cryptocurrency market will soon be free of correlation with risk assets, said Alex Kuptsikevich, senior market analyst at FxPro.
The price of Bitcoin has followed the Nasdaq since the start of the year, and the fall in May coincided with the price drop in technology stocks, which heavily weighed on Nasdaq shares. In May, Bitcoin (BTC) dropped below $30,000 and was under $28,000 by Thursday.
While UST’s peg to the U.S. dollar has been under threat for some time, this crash was more of a coordinated attack on Tether’s price. Retail investors have been left destitute, VCs that backed the project have gone radio silent, and U.S. Secretary of Treasury Janet Yellen has used this implosion as an opportunity to promote more regulation.
In the past, the Luna Foundation, which works with Coinbase Global, has supported stablecoins to protect the UST peg. The foundation announced $1.5 billion in loans to Terra in Bitcoin and UST. UST is an algorithmic stablecoin that holds its value by balancing it with a partner coin. The process works in two ways: first, buying UST causes its price to increase, and second, when people burn UST during an exchange, the supply is deflated.
This has fueled criticisms of Tether’s stability, increasing prices. Although the cost of cryptocurrencies has been declining since April, Tether’s peg to the U.S. dollar is necessary for the crypto market to stay stable. But many stablecoins are worthless and backed by nothing but name.
Several prominent cryptocurrency exchanges have dropped UST and Luna in their listings. While OKX and Binance have since delisted UST, both exchanges have pledged support for Luna 2.0. While there are still concerns about the stability of Luna, there is no need to panic. If the price drops enough, the cryptocurrency will be able to recover. I
As the price of the UST drops, the currency’s stability may not be a viable option. However, it might be the best option for investors wishing to use stablecoins in their everyday lives. However, the UST fiasco may have damaged the reputation of stablecoins.
Shiba Inu (SHIB)
Shiba Inu (SHIB), a virtual currency created by the Japanese, is seeing a significant boost in its price today, thanks to new proposals from its token developers. The Shiba Inu team recently proposed that the BONE token become both a utility and governance token, which could be used to fund actions in layer 2 of the Shibarium protocol.
The Shiba Inu cryptocurrency is a meme-based currency that rose to prominence this year. However, as the price continues to drop, so do its prospects. Finbold, a popular cryptocurrency research platform, shows that searches containing the keyword “Buy SHIB” have dropped by more than 100 percent. The coin’s popularity score is expected to increase in the coming months as it gains adoption in the gaming sector.
The Shiba Inu’s price has risen more than four times in the past week, surpassing Ethereum and Bitcoin’s primetime. Despite the price drop, the number of holders has increased to almost two million, up from 1.2 million a week ago. Whalestats shows that SHIB tokens held by the 100 largest Ethereum wallets have jumped to nearly $600 million.
A software upgrade to Ethereum’s blockchain network may be coming sooner than we expect. According to the Ethereum roadmap, the current PoW chain, Eth1, will be terminated. Users will be migrated to the new Proof-of-Stake chain automatically. Proof-of-Stake is a more efficient consensus mechanism, which requires less computer power and lowers Ethereum’s energy consumption. Moreover, it has been criticized for its environmental impact.
The following software upgrade to the Ethereum blockchain could impact ether’s price. With this upgrade, the transaction fees will drop much lower, allowing the entire blockchain to function faster and at lower costs. In the meantime, the network could become more dominant. But before this upgrade, it’s important to remember the disadvantages of the current system. For one thing, Ethereum can only process 30 transactions per second. But, Vitalik Buterin, the founder of Ethereum 2.0, has claimed that the platform could eventually scale up to 100 transactions per second.
While Ethereum developers have not yet released a date for the Merge Update, they have said that the upgrade could be much quicker than initially predicted. Regardless, the promotion should be a positive step for cryptocurrency, as it will make the blockchain more usable to ordinary people.
In the meantime, developers have been experimenting with “the beacon” (a testnet chain that runs alongside the main blockchain) and are testing the new proof-of-stake system.