Crypto Flipsider News – Terra to Burn 1.3 Billion UST, Polygon Migrates Terra Projects; ETH Falls to $1.7k; JP Morgan Uses Blockchain for Collateral Settlement; “Bitcoin an Insurance Against Financial Catastrophe”; Tether Launches Peso-Backed Stablecoin
Read in the Digest:
- Terra will burn 1.3 billion UST to restore its peg – Polygon unveils fund to help Terra projects migrate networks.
- Ethereum plunges to $1.7 K, risking further drop with $1B options expiry.
- JP Morgan uses blockchain for collateral settlement, foresees increased use in finance.
- Bill Miller: Bitcoin is an insurance against financial catastrophe.
- Tether enters Latin America with new Mexican peso-backed stablecoin.
Terra Will Burn 1.3 Billion UST to Its Restore Peg – Polygon Unveils Fund to Help Terra Projects Migrate Network
On May 26th, Terra passed ‘proposal 1747’ to burn the 1 billion TerraUSD (UST) stored in Terra’s community pool after getting 99.9% votes in favour. The burn will reduce the total supply of UST in circulation by 8%.
By burning a huge chunk of UST, Terra aims to “reduce the outstanding bad debt of the Terra economy.” In addition, the burn is expected to play a significant part in restoring the UST dollar peg by eliminating a significant chunk of excess supply.
Following the Terra ecosystem’s collapse, Ryan Watts, the CEO of Polygon Studios, encouraged developers on the Terra chain to move to the more stable Polygon Network.
Watts has unveiled a “relatively uncapped multimillion-dollar fund” to assist Terra-built projects in migrating to the Polygon blockchain.
According to Watts, the fund will be financed in part by the $450 million Polygon had raised previously, its treasury, and a $100 million ecosystem fund.
Flipsider:
- Terra will be launching a new blockchain on May 27th as the project seeks to move past its UST failure.
Why You Should Care
While Do Kwon and Terraform Labs look to save Terra from extinction, Polygon is trying to save projects on the chain that have suffered from UST’s crash.
Ethereum Plunges to $1.7 K, Risking Further Drop with $1B Options Expiry
Ethereum, the second-largest cryptocurrency, has shed more than 11% over the past 24 hours. ETH fell from a May 26th high of $1,962 to a low of $1,727.
The 24 hour price chart for Ethereum (ETH). Source: CoinMarketCap
Since the start of April, Ethereum has fallen by more than 50% as the sell-off rages on. The price of Ethereum remains below $1,800 at the 100 hourly simple moving average. This puts ethereum at risk of further decline.
The price chart for Ethereum (ETH) since April 1st. Source: CoinMarketCap
The situation could get even worse for ETH holders as a $1.04 billion option expires today, Friday May 27th. Bulls had placed their bets at $2,100 and higher.
If the price of Ethereum is $1,700 and $1,800 when the options expire, bears who placed 50 calls vs 192,300 could cash out above $325 million, which could intensify the already stifling bearish pressure and drag the price of ETH even lower.
Flipsider:
- As Ethereum plunges, with ETH/BTC pairs down by 7.85%, Bitcoin’s dominance has shot up to 46%.
Why You Should Care
Ethereum’s sharp decline began shortly after it was announced that the Beacon chain suffered a record seven-block reorganization.
JP Morgan Uses Blockchain for Collateral Settlement, Foresees Increased Use in Finance
In a new use case, JP Morgan Chase & Co. is now using blockchain to settle its collateral. The move comes as part of recent Wall Street experimentation with the technology in the trading of traditional financial assets.
Clients of the global investment bank are using blockchain to settle their collateral, allowing them to use a wider range of assets as collateral, and to trade outside of market operating hours. The first such transaction was performed on May 20th.
Speaking on the success of the program, Ben Challice, JPMorgan’s global head of trading services, said, “what we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis.”
JP Morgan has also stated that it would expand tokenized collaterals to include equities, fixed income, and other asset types. The bank believes that blockchain will see greater use in the traditional finance sector in the future.
Flipsider:
- JPMorgan also believes that Bitcoin is undervalued at its current price and could soon rise to $38,000.
Why You Should Care
JP Morgan believes that blockchains could act as the bridge connecting institutional investors with decentralized finance (DeFi) platforms in the crypto economy.
Bill Miller: Bitcoin Is an Insurance Against Financial Catastrophe
Bill Miller, the billionaire founder and CIO of investment firm Miller Value Partners, has stated that he considers Bitcoin (BTC) to be an insurance policy against catastrophe. Miller also adds that insurance policies do not have intrinsic value.
Speaking on the ‘Richer, Wiser, Happier‘ podcast, Miller expressed that cryptocurrency is a means for those trapped in conflict to still get financial products.
Miller points to Afghanistan’s financial infrastructure falling apart after the United States withdrew its support. Miller, who remains bullish on Bitcoin, asserts that Afghans who had Bitcoin would have been fine irrespective of macro-financial challenges.
Further explaining his point, Miller underlined that Bitcoin “functioned without the Federal Reserve and without any interference” during the pandemic and in market chaos. As a result, the acclaimed investor believes that the leading digital asset is an ” insurance policy.”
Flipsider:
- Bill Miller has countered Billionaire Warren Buffett’s recent criticism of Bitcoin being a non-productive asset.
Why You Should Care
Miller believes the position of Bitcoin could spur more institutional adoption this year, especially among endowments and foundations.
Tether Enters Latin America with New Mexican Peso-Backed Stablecoin
Tether, the company operating the USDT, the world’s biggest stablecoin with a $73 billion market cap, has announced the launch of a new Mexican peso-pegged stablecoin, MXNT. The stablecoin is pegged 1:1 to the Mexican peso.
The Peso-backed MXNT will be available on the Ethereum, Tron and Polygon blockchains at launch. MXNT becomes Tether’s fourth stablecoin, joining the dollar-pegged USDT, euro-pegged EURT, and Chinese yuan-pegged CNHT.
Tether has identified Mexico as “a prime location for the next Latin American crypto hub.” Tether hopes the MXNT can solve internal money transfer issues and assist in the multibillion-dollar flow of remittances into Mexico.
Tether’s CTO Paolo Ardoino explained that, by launching the peso-backed stablecoin, the company hopes to create a store of value for people in Latin America. He also outlined his hope that the move would trigger the launch of more peso-pegged stablecoins.
Flipsider:
- The panic created by the UST crash saw more than $10 billion withdrawn from Tether (USDT).
Why You Should Care
Tether’s CTO Paolo Ardoino explains that, by providing a store of value, Tether hopes the MXNT will assist in onboarding new crypto users in the region.
Text source: DailyCoin.com
