Terra’s Difficult Post-Collapse Path

The collapse of Terra has led to a scramble for pieces as investors search through the rubble, with some sifting through what remains and others trying to back away from their investment entirely. At this same time, experts warn that regulators will use today’s events as compelling evidence against stablecoins which have become increasingly popularized recently due in part because they are less volatile than traditional currencies. With 80% of eligible token holders voting in favor, it seems that the majority wants to rebuild what was before with only non-algorithmic components.

Mike Novogratz, the CEO of Galaxy Digital has spoken about how post-LUNA redemption cycles are possible. Delphi Digital said that they knew it was only a matter of time before something like this happened but underestimated just how dangerous “death spirals” can be when dealing with cryptocurrencies such as bitcoin and luna tokenized currency.

LUNA has not only faced scrutiny from investors but also its own ambassadors. The logo was briefly removed from the website after May 9th and it will be added back soon, unlike Three Arrow Capital’s Su Zhu who deleted boosterish tweets for Terra due to an accidental misclick.

Bitcoin, Ethereum, and most other major cryptocurrencies improved over the weekend. Compared to earlier this week, they could boast about it but when looking at the larger picture bitcoin still remains deep within a bear market with no end anywhere soon.

The crypto market is seeing some ups and downs. Bitcoin recently traded at about $30,370 a 3.3% rise from its ending point Friday while Ether was up similarly over the same period but holding just under 2k – where it’s been for much of this past few weeks. Other coins saw even greater gains including AVAX which rose more than 8%. SOL and TRX went over 5%).

Bitcoin continues to show strength as it retests support levels from last week. The cryptocurrency is currently trading near the $30K range but will need a successful breakout above 32k USD before more upsides are possible according to Joe DiPasquale CEO of BitBull Capital.

Investors who have grown tired of central banking mistakes and the economic consequences that come from them are moving away from riskier assets such as digital currencies or stocks. These people seem to believe we’re on track for an upcoming recession, which will only make things worse in terms of value destruction already witnessed this year thanks largely due to Russia’s unprovoked invasion of Ukraine.

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The S&P 500 ended last Friday with a surge, but all that did was help the index escape from a bear market territory where it lingered for much of the day. The tech-heavy Nasdaq Composite which has been closely tracking crypto markets rallied late on Tuesday, holding its ground from the previous day as well. But The Dow Jones Industrial Average (DJIA) declined for an eighth consecutive week. Each index fell 2.9% over this seven-day period ending last Friday evening before turning back up again over the weekend.

The economic recovery of 2021 and early 2022 was fueled by the retail sector. This week, three major companies in that industry showed signs of weakness with Walmart down 17%, Target showing 9% lower than expected earnings-per-share growth rates during its most recent quarter, while Kohl’s saw an 18% decline from last year’s quarterly report. The company plans to shut five stores nationwide.
The performance these businesses have seen may cause concern among investors who had counted on them as being pillars upon which our economy has risen recently. In a cautious tone, DiPasquale noted that crypto markets had yet to see strong buying action indicative of proper reversal. BitBull plans for both positive and negative price fluctuations from here on out according to the CEO who has been in this industry since 2014.