OPINION
Market Rating Before FOMC MeetingJan 31
The Decline in Cryptocurrencies Continue: Bitcoin is at 2-Year Low
In recent months, TerraUSD, which has become known for its decentralized stable cryptocurrency project, had rapidly increased its value with an attempt to create a bitcoin reserve. However, TERRAUSD has recently encountered a major liquidity problem.
The UST stablecoin, which should stay stable at $ 1, fell to $ 0.18 due to the liquidity problem due to the high volume of sales, while the losses of the network's local cryptocurrency Luna reached 99 percent.
Indeed, Bitcoin and Awax, which the Luna Foundation released from its reserves, are the main drivers of the cryptocurrency market decline on May 12. On the other hand, according to data released by the U.S. Department of Labor, the Consumer Price Index (CPI) rose 8.3 percent on an annual basis in April, exceeding market forecasts, creating expectations that the U.S. Federal Reserve (FED) will not scale back monetary tightening, creating expectations that the dollar has a high relative risk sensitivity. increased its pressure on assets.
At this point, Luna, which was traded at around $120 a few days ago, depreciated by around $0.05, while bitcoin, the leader of the crypto money market, saw its lowest level since December 2020 with $26,617. After testing the level of 1 761, Ethereum, which opened at $ 2 091, was trading around $ 1900, while Awax went down to 23.51 with a loss of more than 28 percent.
On the subject, US Treasury Secretary Janet Yellen emphasized that with the sharp depreciation of the stablecoin known as TerraUSD, they need to create an appropriate control structure against the rapidly growing product that poses a threat to financial stability. Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC) recently, stated that the leading stablecoins are generally associated with large exchanges, and drew attention to the fact that exchanges often open transactions against their customers.
Although Foundation Guard is said to have sold $1 billion worth of bitcoin, it is likely that the pressure on the cryptocurrency market will remain high, while whether or not reserves are sufficient is a matter of debate. At this point, the $30 thousand mark for bitcoin mining production is very critical.
