South Korea Seeks to Freeze 3,313 Bitcoin Allegedly Linked to Luna Founder Do Kwon

South Korean prosecutors are seeking to freeze 3,313 bitcoins at two cryptocurrency exchanges allegedly tied to luna founder Do Kwon. The coins were moved soon after a South Korean court issued an arrest warrant for the Terraform Labs co-founder. Luna Foundation Guard has denied transferring the coins. Korean Authorities Ask Crypto Exchanges to Freeze Bitcoin.

South Korean authorities have reportedly asked cryptocurrency exchanges Kucoin and Okx to freeze 3,313 bitcoins allegedly tied to Terraform Labs co-founder Kwon Do-hyung, also known as Do Kwon. The coins were transferred to the trading platforms soon after a warrant was issued for Kwon’s arrest in South Korea.

On Tuesday, an official at the Seoul Southern District Prosecutors’ Office confirmed to Bloomberg that requests have been sent to the two cryptocurrency exchanges to freeze the 3,313 BTC.

The coins were transferred to the trading platforms from a wallet allegedly linked to Luna Foundation Guard (LFG) that was created on Sept. 15, according to crypto researcher Cryptoquant. The researcher told the publication: Cryptoquant specified new bitcoin addresses owned by LFG based on transaction patterns, adjacent flows and material non-public information.

However, Luna Foundation Guard denied the allegation Tuesday evening. The group tweeted its treasury’s bitcoin address, adding: “LFG hasn’t created any new wallets or moved BTC or other tokens held by LFG since May 2022.” Do Kwon Says: ‘I’m Making Zero Effort to Hide’

The luna founder’s whereabouts are currently unknown. He was believed to be in Singapore but the Singapore police force said earlier this month that he is currently not in the city-state. Kwon has maintained that he is not “on the run,” tweeting Monday: I’m making zero effort to hide. I go on walks and malls.

The Seoul Metropolitan Police have asked various crypto exchanges to ban Luna’s capability of withdrawing company funds, the report said. It was not clear which exchanges were asked or whether they have complied. Terraform Labs lost $30 billion this month when Terra’s UST stablecoin and LUNA cryptocurrency went into a death spiral, costing investors billions globally.

The associated Luna Foundation Guard was charged with protecting UST’s peg using a war chest of billions of dollars in bitcoin (BTC); it ultimately failed. Terraform Labs CEO Do Kwon is already under the financial crimes microscope and is facing a tax evasion investigation by a South Korean police unit known as the “Grim Reaper.” Luna Foundation Guard did not respond to a request for comment by press time.

A South Korean court issued an arrest warrant for Kwon on Sept. 14. He is accused of fraud after the collapse of the cryptocurrency luna (now called luna classic (LUNC)) and stablecoin terrausd (UST). In addition, the country’s ministry of foreign affairs is reportedly planning to revoke his passport.

Moreover, Interpol has issued a Red Notice for the Terraform Labs co-founder. “A Red Notice is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action,” Interpol’s website details, adding that “Red Notices are issued for fugitives wanted either for prosecution or to serve a sentence.”

By: Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Source: South Korea Seeks to Freeze 3,313 Bitcoin Allegedly Linked to Luna Founder Do Kwon – Featured Bitcoin News

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When the Luna crypto network collapsed, it’s estimated that $60 billion got wiped out of the digital currency space. Algorithmic stablecoins (UST) are not the same as Tether or USD Coin, which are backed by actual dollars or assets stored in a bank. An arrest warrant has been issued for Do Kwon, the co-founder of Terraform Labs, where the sister tokens Luna and TerraUSD were held.

Terra network and its leader, Do Kwon, rose to prominence in the cryptocurrency world over the course of four years, all ending in a disastrous fall from grace. The Luna crypto network collapsed in what’s considered the largest crypto crash ever, with an estimated $60 billion wipeout, shaking the global digital currency market.

There are two stories regarding Luna crypto: the TerraUSD/UST stablecoin and the actual Luna coin. Once Luna and UST crashed, there was a total liquidity crunch in the cryptocurrency space that caused an even more catastrophic loss of value. The crypto community still hasn’t recovered.

You may have heard of TerraUSD and Luna, here is a quick breakdown of what they are exactly. Lots of moving parts within the Luna network ahead of its collapse.TerraUSD (also known as UST) and Luna are two sister coins on the same network.

Terra is a blockchain network, similar to Ethereum or Bitcoin, that produces Luna tokens. The network was created in 2018 by Do Kwon and Daniel Shin of Terraform Labs. Terraform Labs created the UST coin to be an algorithmic stablecoin on the Terra network. While other stablecoins (USDC or Tether) are fiat-backed, the UST would not be backed by real assets. Instead, the value of UST would be backed by its sister token, Luna. More on that later.

Stablecoins are supposedly safe havens in the crypto space since they’re meant to have a fixed value of around 1 USD. The goal being, a steady store of value for investors, unlike other volatile coins (like ethereum).Luna was Terra’s blockchain native token, similar to how ether is used on the Ethereum network. Luna had four different roles in the Terra network:

  1. A method to pay for transaction fees in the Terra network.
  2. A mechanism for maintaining Terra’s stablecoin peg.
  3. Staking in Terra’s delegated proof of stake (DPoS) to validate network transactions.
  4. Participation in the platform’s governance by adding to and voting on proposals when it comes to changes in the Terra network.

How much was Luna worth?

A Luna coin was going for around $116 in April and ended up dropping to a fraction of a penny before being delisted. Before that, the coin went from being worth less than $1 in early 2021 to creating many crypto millionaires within a year. This led to Kwon’s cult hero status among (some) retail crypto investors. Many success stories popped up in the media about how regular folks were able to get rich from Luna.

The Luna token skyrocketed about 135% in less than two months until its peak in April 2022. The largest incentive was that you could stake your UST holdings on the Anchor lending platform for a 20% annual yield. Many analysts felt that this absurd rate was unsustainable.

The Anchor Protocol was a decentralized money market built on the Terra blockchain. This platform became popular for its aforementioned 20% yield for UST holders who deposited their tokens on the platform. Then Anchor would turn around and loan the deposit to another investor. Many skeptics were concerned about where the money came from to pay these rates. Some considered this an obvious Ponzi scheme. At one point, as much as 72% of UST was deposited in Anchor because the platform was the primary driver of demand for Terra.

What happened to UST?

Before we look at this crypto disaster, we need to discuss stablecoins briefly. A stablecoin is pegged to a more stable currency like the US dollar. Tether and USDC are both tied to USD. Stablecoins are used to hedge against volatility in the crypto space. For example, let’s say that Ether’s price is $1,000. You could exchange one Ether for 1,000 USDC tokens. When investors expect a hit in the crypto market, they put their money into stablecoins to protect their assets.

The UST coin was not backed by an actual US Dollar but rather an algorithmic stablecoin. The belief was that Terraform Labs could use clever mechanisms along with billions in Bitcoin reserves to maintain the peg of UST without the backstop of the USD. To create UST you have to burn Luna. So, for example, when Luna token’s price was $85, you could trade one token for 85 UST. This deflationary protocol was designed to ensure there was long-term growth for Luna.

For UST to retain its peg, one UST could be changed for $1 worth of Luna at any time. If UST slipped, traders could make money from buying UST and then exchanging it for Luna. Both Luna and UST crashed once UST lost its peg to the dollar, which was what qualified it as a stablecoin.

TerraUSD was risky because it wasn’t backed by cash, treasuries or other traditional assets like the popular stablecoin tether. The stability of UST was derived from algorithms that linked the value to Luna. Many experts were skeptical that an algorithm could keep two tokens stable.

Why did LUNA crash?

The Luna crypto crash was caused by its connection to TerraUSD (UST), the algorithmic stablecoin of the Terra network. On May 7, over $2 billion worth of UST was unstaked (taken off the Anchor Protocol), and hundreds of millions of it were quickly liquidated. There’s debate as to whether this happened as a response to rising interest rates or if it was a malicious attack on the Terra blockchain. The huge sell-offs brought down the price of UST to $0.91, from $1. As a result, traders started to change 90 cents worth of UST for $1 of Luna.

Once a large amount of UST had been offloaded, the stablecoin started to depeg. In a panic, more people sold off UST, which led to the minting of more Luna and an increase in the circulating supply of Luna. Following this crash, crypto exchanges started to delist Luna and UST pairings. Long story short, Luna was abandoned as it became worthless.

What happened after the Luna crash?

The Luna meltdown impacted the entire cryptocurrency market, which was already highly volatile and experiencing difficulty at the time. It’s estimated that the Luna crash ended up tanking the price of bitcoin and causing an estimated loss of $300 billion in value across the entire cryptocurrency space. Crypto leaders Voyager and Celsius filed for bankruptcy. Three Arrows Capital (3AC) was forced into liquidation.

Many people lost their life savings and suffered financial hardships due to the Luna crypto crash. If you do a quick search online, you’ll find many of these terrible stories. Many loyal Luna fans (who referred to themselves as “Lunatics”) took to Reddit threads to share their disastrous stories. One retail crypto investor even confessed that they lost their savings of $20,000 in Luna.

The only winners were those who exited their positions before the crash. One winner that we have to highlight is the hedge fund Pantera Capital. They saw a 100x return on an initial investment of $1.7 million. The company liquidated its Luna position prior to the collapse for a return of $171 million.

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JPMorgan Says Bitcoin Is Undervalued By 28%, Says Cryptocurrencies Are Now A ‘Preferred Alternative Asset’

Bitcoin price action might not reflect it, but the leading cryptocurrency by market cap could be massively undervalued, according to a variety of fundamental metrics that focus on coin issuance. Any asset – be it stock, currency, commodity, or otherwise – goes through boom and bust cycles; bull and bear markets. These cycles are more rapid and take place more frequently in crypto than they do in traditional market counterparts.

The reason is both due to the always-on 24/7, global crypto market and the speculative nature of Bitcoin, Ethereum, and other top coins. Even with adoption taking place, they’re still far from achieving their potential.When speculative assets reach a peak of a bull cycle, they are typically far more overvalued than they should be, which causes such an extreme correction back down toward the “mean.” During bear cycles, speculative assets tend to overcorrect as things appear worse off than they actually are.

These tools are widely known, but when combined paint a clear picture that backs up any chance that the top coin by market cap is actually undervalued at $40,000 per BTC.

Despite the crypto slump, banking giant JPMorgan says bitcoin is massively undervalued. Maintaining its estimate of bitcoin’s fair value at $38,000, the bank today reiterated the assessment it gave the asset in February when the cryptocurrency was trading around $43,400. This price is approximately 28% higher than its current level of $29,757.

In a note to clients issued Wednesday, the bank has also stated that it is replacing real estate with digital, or crypto, assets as its preferred alternative asset class along with hedge funds, citing “potential lagged repricing” in private equity, private debt and real estate. Alternative assets typically refer to ​​investments that aren’t stocks, bonds or cash.

The appraisal is a nod of confidence to bitcoin, which is currently trading at less than half its all-time high of $68,721, and the broader category in general. In addition to rising interest rates and the fallout from the war in Ukraine, the cryptocurrency market is grappling with the $50 billion collapse of algorithmic stablecoin TerraUSD and its sister token LUNA. The total market capitalization of cryptocurrencies currently sits at $1.3 trillion, a dramatic decline from $3 trillion in November.

“The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more generally,” the bank’s strategists, led by Nikolaos Panigirtzoglou, noted in the report.

The strategists also believe that “the trajectory for VC funding would be crucial in helping the crypto market to avoid the long winter of 2018/2019”, which followed the initial coin offerings boom. Just today, Ethereum scaling startup Starkware raised $100 million at an $8 billion valuation and venture giant Andreessen Horowitz announced a $1.5 billion allotment for crypto investments as part of its larger $4.5 billion fund.

“Thus far there is little evidence of VC funding drying up post-Terra’s collapse. Of the $25 billion VC funding year-to-date, almost $4 billion came after Terra,” the strategists noted. “Our best guess is the VC funding will continue and a long winter similar to 2018/2019 would be averted.”

I report on cryptocurrencies and other applications of blockchain technology. I also edit the weekly Forbes Crypto Confidential newsletter and contribute to our premium research service

Source: JPMorgan Says Bitcoin Is Undervalued By 28%, Says Cryptocurrencies Are Now A ‘Preferred Alternative Asset’

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Massive 2022 ‘All-Time High’ Bitcoin Price Prediction Comes With A Serious Ethereum, BNB, XRP, Solana, Cardano, Luna And Avalanche Warning

Bitcoin and cryptocurrency prices have struggled this year, with the Federal Reserve’s plan to raise rates and potentially trim its balance sheet spooking investors.

The bitcoin price has lost around 40% of its value since hitting an all-time high of nearly $70,000 per bitcoin in November. Smaller cryptocurrencies, including ethereum, BNB BNB -0.9%, XRP XRP -2.7%, solana, cardano, luna and avalanche, have also fallen back—though some are on track to break records in 2022.

Now, a panel of cryptocurrency experts has predicted the bitcoin price will peak at almost $82,000 in 2022 before dropping to just above $65,000 by the end of the year—but warned a more advanced blockchain such as ethereum, BNB, XRP, solana, cardano, luna or avalanche could eventually eclipse bitcoin.

“There’s still plenty of uncertainty about the short-term bitcoin outlook,” Asher Tan, the chief executive of Australia-based crypto exchange CoinJar and panel member said in a statement. Tan has a more conservative outlook on the bitcoin price than the panel average.

“Given the macroeconomic headwinds, it would not surprise me to see bitcoin spend the whole year bouncing around between $30,000 to $60,000—the sort of conditions that are terrible for traders, but rewarding for accumulators with a multi-year timeframe.”

The panel, made up of 35 people from the world of crypto and put together by financial comparison website Finder, has returned a lower average bitcoin price prediction for the end of 2022 than it did in January—at the time predicting the bitcoin price would end December at just over $76,000.

The longer-term panel average has also dipped with bitcoin now forecast to be worth just over $420,000 by the end of 2030, down around 25% from an October forecast of $567,000.

However, some panel members have become more bullish since then. Martin Fröhler, the chief executive of ethereum-based trading platform Morpher gave one of the most bullish end-of-2022 predictions, pointing to “political uncertainty, inflation, and an ever increasing desire to own non-government controlled assets” as likely to push the bitcoin price to a new all-time high.

The continued success of ethereum and recent rallies for other top ten cryptocurrencies such as BNB, XRP, solana, cardano, luna and avalanche may have weighed on the panel’s outlook, with 50% predicting bitcoin will eventually be displaced as the most valuable cryptocurrency.

“Bitcoin is a one trick pony,” said Thomson Reuters technologist and futurist Joseph Raczynski who thinks ethereum has “far grander” potential than bitcoin as “a massive platform of the internet of value.”

“For now, bitcoin really only serves as another currency, akin to a dollar, euro, or pound. Other blockchains that serve a multitude of purposes will likely have a chance to take the throne.”

Others are even more downbeat about bitcoin’s prospects. John Hawkins, a senior lecturer at the University of Canberra, returned one of the bleakest bitcoin price predictions, forecasting bitcoin will be worth just $5,000 by the end of 2025 and dropping to a mere $100 per bitcoin by 2030 as it loses out to ethereum and state-backed alternatives.

“As well as private crypto being replaced by central bank digital currencies, and a general collapse of the speculative bubble, I think bitcoin will lose out to ethereum which has a stronger use case, especially if ethereum ever converts to proof-of-stake and so becomes more environmentally responsible.”

Ethereum’s long-awaited transition to the less energy-demanding proof-of-stake consensus mechanism, abandoning the proof-of-work system pioneered by bitcoin, was expected to happen over the next couple of months but has recently been delayed until the end of this year.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk

Source: Massive 2022 ‘All-Time High’ Bitcoin Price Prediction Comes With A Serious Ethereum, BNB, XRP, Solana, Cardano, Luna And Avalanche Warning

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‘Market Is Not Quite Ready’—Bitcoin Billionaire Issues A Serious Crypto Warning As The Price Of Ethereum, BNB, Solana, Cardano, XRP And Luna Suddenly Crash

Bitcoin and cryptocurrency prices have bounced back this week, riding a wave of positive news even as researchers warn of crypto thefts.

The bitcoin price came within touching distance of $50,000 per bitcoin but has today dropped back, losing more than $2,000 per bitcoin in a matter of hours. Ethereum has also erased its latest gains, despite traders eagerly eyeing a long-awaited upgrade.

Now, after El Salvador last week postponed its controversial $1 billion bitcoin-backed bond, outspoken bitcoin billionaire Michael Saylor has warned the market perhaps isn’t “quite ready” for bitcoin bonds.

“I’d love to see a day where people eventually sell bitcoin-backed bonds like mortgage-backed securities,” Saylor, the chief executive of business intelligence software company MicroStrategy, which has pivoted to become a bitcoin acquisition vehicle over the last two years, told Bloomberg in an interview. “The market is not quite ready for that right now. The next best idea was a term loan from a major bank.”

Last week, El Salvador, which became the world’s first country to adopt bitcoin as legal tender last year, revealed it had postponed its planned $1 billion bitcoin bond offering with the country’s finance minister Alejandro Zelaya blaming unfavorable market conditions—but El Salvador’s president Nayib Bukele blaming the delay on necessary pension reforms.

“I think this is not the time,” Zelaya said in comments reported by Reuters, with Russia’s invasion of Ukraine unsettling markets in recent weeks. “In May and June sometimes you can, but the market variables get different. After September, it is difficult to raise, unless you are previously funded, as in the case of bitcoin bond.”

The hotly-anticipated bitcoin bond, designed to fund the creation of an ultra-low tax bitcoin city in El Salvador, will have a “substantial oversubscription” that could reach $1.5 billion, according to Zelaya. Half of the funds raised will be used by the country to buy more bitcoin and the rest earmarked to develop bitcoin mining infrastructure powered by a volcano.

Earlier this week, MicroStrategy announced it’s bitcoin-focused subsidiary MacroStrategy had taken on a $205 million loan to buy more bitcoin, adding to its 125,000 bitcoin hoard. MicroStrategy stock price, up some three-fold since it first began buying bitcoin, has slide 6% this week.

The loan will give MicroStrategy “an opportunity to further our position” as the largest publicly-traded bitcoin investor, Saylor said in a statement.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk

Source: ‘Market Is Not Quite Ready’—Bitcoin Billionaire Issues A Serious Crypto Warning As The Price Of Ethereum, BNB, Solana, Cardano, XRP And Luna Suddenly Crash

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Critics:

MicroStrategy CEO and Bitcoin permabull, Michael Saylor believes that traditional financial markets aren’t quite ready for Bitcoin-backed bonds. Saylor told Bloomberg on Tuesday, that he’d love to see the day come where Bitcoin-backed bonds are sold like mortgage-backed securities, but warned that, “the market is not quite ready for that right now. The next best idea was a term loan from a major bank.”

The remarks come two days after MicroStrategy’s (MSTR) Bitcoin-specific subsidiary MacroStrategy, announced that it had taken out a $205 million Bitcoin-collateralized loan to purchase even more Bitcoin. This loan was unique, as it marked MicroStrategy’s first time borrowing against its own Bitcoin reserves — which are currently valued at approximately $6 billion — to buy more of the cryptocurrency.

Saylor’s comments also follow El Salvador’s recent decision to postpone the issuance of its $1 billion dollar Bitcoin-backed “Volcano Bond” on March 23rd. According to El Salvador’s Finance Minister Alejandro Zelaya, the decision to delay the bond was due to general financial uncertainty in the global market driven by conflict in Ukraine.

In a potential warning to El Salvador, Saylor said that the country’s Volcano Bond was somewhat more risky than his company’s Bitcoin-collateralized loan,Saylor added that he remains extremely bullish on the long-term potential for Bitcoin-based bonds, going as far to say that it would be a good idea for cities like New York to use Bitcoin as a debt instrument.

Related: MicroStrategy CEO won’t sell $5B BTC stash despite crypto winterSince its initial $250-million Bitcoin investment in August 2020, MicroStrategy has now amassed a substantial 125,051 BTC — which at the current price of $44,547 equates to $5.5 billion. MicroStrategy has made a series of separate BTC purchases using the company’s cash on hand as well as the proceeds of sales of convertible senior notes in private offerings to institutional buyers.

Saylor’s actions have gradually transformed MicroStrategy into a partly leveraged Bitcoin holdings company, with MSTR shares closely correlated with the price of Bitcoin.

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Bitcoin Is Steady As It Braces For A Big Week

Led by bitcoin, most major cryptocurrencies have spent the past seven days in relative tranquility. Bitcoin and ether have been trading -0.69% and -4.46% on the week respectively, according to crypto data aggregator COIN360. The biggest movers are Binance’s BNB, which has added 6.95% over the same period, and Dogecoin, which is down by 8.28%.

As of 8.06 a.m. ET, bitcoin is still facing resistance at $33,576 though on-chain metrics are becoming more bullish. For instance, “bitcoin exchange balances have started to show signs of sustained outflows,” tweeted blockchain data and intelligence provider Glassnode. Approximately 40,000 BTC, or $1.37 billion, have been withdrawn over the last three weeks, reversing weeks of inflows that coincided with the 50% market crash. The withdrawals suggest that traders are moving their funds to outside wallets and aren’t looking to sell in the near term.

That said, there have been some standouts among altcoins. EOS, the native cryptocurrency of the EOS.IO blockchain platform, rallied nearly 11% in the last few days following the announcement that crypto startup Bullish is preparing for a public listing via a $9 billion SPAC deal. During the past year, Bullish received an initial capital injection of $100 million and digital assets, including 20 million EOS, from Block.one, the company behind EOS. Additionally, Block.one’s CEO Brendan Blumer will become the chairman of Bullish upon the transaction’s close.

Another big altcoin winner of the week is Terra (LUNA), a native token of the namesake protocol for issuing fiat-pegged stablecoins,  – up by 30.86%. The token seems to have found its footing after the volatility it saw in May. On July 7, Terraform Labs, the project’s creator, committed approximately $70 million to boost the reserves of its savings protocol Anchor. LUNA’s market capitalization has leaped from $300 million to $3.4 billion since January.

But all eyes will be on one of the largest releases of locked shares (16,240) in the Grayscale Bitcoin Trust (GBTC), bound to take place on July 17. In total, 40,000 shares will become unlocked in the coming weeks.

The trust, set up as a private placement where qualified investors can buy shares directly from Grayscale, requires investors to hold their shares for six months before selling them on the secondary market. GBTC saw massive interest in late 2020 and early 2021 among institutions looking for a simple way to get exposure to bitcoin.

Opinions on the impact of the event on the market differ. JPMorgan strategists think the selling will add pressure on the cryptocurrency. “Selling of GBTC shares exiting the six-month lockup period during June and July has emerged as an additional headwind for bitcoin,” wrote the bank’s analysts in a note issued earlier in June. “Despite some improvement, our signals remain overall bearish.”

Analysts at cryptocurrency exchange Kraken, however, seem to disagree: “market structure suggests that the unlock will not weigh materially on BTC spot markets anytime soon, if at all, like some have claimed.” Whether or not the unlock creates a catalyst for price action, it remains one of the most anticipated events of the week.

Follow me on Twitter or LinkedIn.

I report on cryptocurrencies and emerging use cases of blockchain. Born and raised in Russia, I graduated from NYU Abu Dhabi with a degree in economics and Columbia University Graduate School of Journalism, where I focused on data and business reporting.

Source: Bitcoin Is Steady As It Braces For A Big Week

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Critics:

Bitcoin was holding steady after surging to $40,000 following another weekend of price swings following tweets from Tesla boss Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin but may resume transactions using it.

In other news, some 81% of fund managers believe Bitcoin is in a bubble, even after May’s 35% price crash, according to the latest Bank of America Global Fund Manager survey and reported by Coindesk.

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The results for the period June 4-10 are up six percentage points from last month’s data, indicating sentiment on Wall Street has turned more bearish. 

The survey showed 72% of the fund managers surveyed think the recent uptick in inflation is transitory. Bitcoin is often seen as a hedge against inflation, and many crypto analysts attribute the cryptocurrency’s gains over the past year to concern about increasing inflation.

Last week, El Salvador became the world’s first country to recognize bitcoin as legal tender.

References

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