Crypto Flipsider News – LUNA Plunges 99% as UST Loses Dollar Peg; SEC Approves Valkyrie Bitcoin ETF; Dapper Labs Debuts $725M Ecosystem Fund; the EU to Regulate DeFi While the UK Supports Safe Crypto Adoption; Coinbase is not Buying Robinhood
Read in the Digest:
- Terra (LUNA) plummets 98% as Binance halts withdrawals, Do Kwon outlines recovery plan.
- Valkyrie receives second futures Bitcoin ETF approval under the 33 Act.
- Dapper Labs launches $725 million fund to enhance the FLOW ecosystem.
- The EU moves to regulate DeFi, while the U.K. looks to support safe crypto adoption.
- Coinbase execs confirm that the exchange is not buying Robinhood.
Terra (LUNA) Plummets 98% as Binance Halts Withdrawals, Do Kwon Outlines Recovery Plan
It has been a torrid few days for Terra (LUNA) investors, as they have seen the price of LUNA tank 98% in just 48 hours. The price of LUNA began to slump after its algorithmic stablecoin, UST, lost its 1:1 USD peg.
The 24 hour price chart for Terra (LUNA). Source: Coinmarketcap
After losing over 50% on Monday to hit a low of $32, matters went from bad to worse as rumours started to circulate about market manipulation by big players.
This speculation was further strengthened after Binance announced that the world’s largest exchange had suspended withdrawals of LUNA and UST.
The 7 day price chart for Terra (LUNA). Source: Coinmarketcap
Over the last 24 hours, the price of LUNA has fallen by 97%, and the Altcoin that hit giddy highs of $119 on April 5th, is now trading at around $1.65 as of this writing. Terra, the 8th largest cryptocurrency as of 72 hours ago, is now ranked 83rd, having lost more than $27 billion in market cap.
Flipsider:
- After losing its peg for the third consecutive day, UST has tumbled down to $0.4
- Do Kwon, CEO of Terraform Labs, outlined his rescue plan for the Terra ecosystem.
The 24 hour price chart for TerraUSD (UST). Source: Coinmarketcap
Why You Should Care
To restore the 1:1 dollar peg, Kwon has suggested that his team increase the base pool from 50 million to 100 million special drawing rights (SDR), and decrease the PoolRecoveryBlock from 36 to 18.
Valkyrie Receives Second Futures Bitcoin ETF Approval Under the 33 Act
Leading asset management firm Valkyrie has announced that its proposal for a futures Bitcoin ETF has been approved by the U.S. Securities and Exchange Commission (SEC).
According to official documents, the Valkyrie XBTO Bitcoin Futures Fund was first filed in August 2021, but only received approval from the SEC after the application was made under a different exchange act – the ‘Securities Exchange Act of 1934‘, or ‘the 33 act‘, which also helped Teucrium get the green light for a similar product.
Following its approval, the asset management firm can now offer investors the Valkyrie Bitcoin Strategy ETF (BTF), which mainly invests in bitcoin futures contracts. Additionally, the Valkyrie Bitcoin Trust (VBTC) will be available only to accredited investors and invest in Bitcoin.
Flipsider:
- The Bitcoin spot ETF, which had all but been dismissed by the SEC, will launch in Australia this week.
Why You Should Care
The approval of two ‘33 Act’ bitcoin futures ETFs has raised hope among investors that a spot bitcoin ETF approval isn’t far behind.
Dapper Labs Launches $725 Million Fund to Enhance the FLOW Ecosystem
On May 10th, Dapper Labs, the brains behind Flow, one of the top gaming blockchains, announced that it had raised a whopping $725 million in its fundraiser to enhance its Web 3.0 ecosystem by onboarding more crypto developers.
Roham Gharegozlou, the CEO of Dapper Labs, stated that his goal is to attract more people to choose FLOW over competitors like Ethereum. Flow currently has over 7,500 people building on the platform.
According to the press release, the ecosystem fund will be used for token grants, Web 3.0 gaming, infrastructure, decentralized finance (DeFi), NFT content and creators, a potential team expansion, and acquisitions in the Flow ecosystem.
The fund was backed by Andreessen Horowitz (a16z), Coatue, CoinFund, Greenfield One, Liberty City Ventures, Digital Currency Group, and Union Square Ventures.
Flipsider:
- FLOW has also suffered in the wider crypto market slump, with its value sliding 24% over the past two weeks.
The 1 month price chart for FLOW. Source: Coinmarketcap
Why You Should Care
The sizeable ecosystem fund launched by Dapper Labs could help to scale the Flow blockchain enough to compete with Ethereum, which is currently the standard in the industry.
The EU Moves to Regulate DeFi, While the UK Looks to Support Safe Crypto Adoption
Europe has taken a big step towards regulating its decentralized finance (DeFi) space, as the European Union (the EU) announced that it would be testing an embedded form of DeFi’s supervision.
The move marks the EU’s first attempt to regulate the DeFi industry, and, according to the announcement, a the body intends to launch a pilot project for the rules regulating the DeFi space this year.
In the “Queen’s Speech” delivered on Tuesday 10th by Prince Charles, the UK has revealed two bills for the support and safe adoption of crypto. The first bill intends to combat illicit financing in the crypto industry.
The legislation aims to protect consumers and ensure that cryptocurrencies are used safely and responsibly, while the second bill will give the government authority to “seize and recover crypto assets.”
Flipsider:
- The regulatory pressure in India has caused the leading crypto exchange, Coinbase, to exit the country with the highest number of crypto owners.
Why You Should Care
The measures being taken by the EU will bring increased supervision to the $150 billion DeFi industry, which is currently unregulated.
Coinbase Execs Confirm That the Exchange Is not Buying Robinhood
Following its most recent earnings call, in which Coinbase posted a net loss of $430 million for the first quarter of 2022, the exchange’s executives have confirmed that the exchange will not be merging with or acquiring Robinhood.
According to the COO of Coinbase, Emilie Choi, the idea of a tie-up with Robinhood was the most upvoted item on a discussion board. However, the venture capital arm of Coinbase has thus far only made investments into Web 3.0 units, like Alchemy and Uniswap.
Choi suggested that investments such as these will improve Coinbase’s long-term financial and strategic position, which may be true given how, during the early web era, Microsoft bought shares in emerging companies of their time, like Facebook.
Flipsider:
- Since the release of its Q1 performance, Coinbase has come under intense fire, with many suggesting that the exchange may soon go bankrupt.
Why You Should Care
Coinbase’s executives appeared unconcerned by the company’s recent financial performance, stating that they have no plans to downsize despite first-quarter losses.
Text source: DailyCoin.com
