The UST cryptocurrency, Terra’s $2.2 billion Bitcoin hoard and the BCH fallout are all signs of a crypto-cuddly bear market in which investors are taking profits, or at least waiting for bigger things to come before buying more coins.
The “what was bitcoin worth in 2012” is a question that has been asked many times. The answer to the question is $2.2B Bitcoin bag.
On May 10, Bitcoin (BTC) plummeted below $30,000 for the first time in ten months as the Terra Blockchain system remained in disarray.
1 hour candle chart of BTC/USD (Bitstamp). TradingView (source)
Bitcoin is now trading at $29,700.
BTC/USD hit $29,731 on Bitstamp, according to data from Cointelegraph Markets Pro and TradingView.
The overnight BTC price performance occurred despite both plummeting stock markets and new difficulty for Terra’s US dollar stablecoin, TerraUSD (UST).
As Cointelegraph has reported, UST was hit by a major selling onslaught this week, culminating in Terra deploying its massive 750 million BTC reserves to support its USD peg.
Initial liquidity measures to reduce the threat’s effect, however, were inadequate, and UST plummeted to lows of Initial liquidity steps to mitigate the impact of the threat proved insufficient, however, and UST subsequently fell to lows of $0.67, according to data from CoinMarketCap..67, according to CoinMarketCap statistics.
Simultaneously, BTC/UST on major exchange Binance started acting strangely, hitting highs of over $42,000, while other Bitcoin dollar exchanges battled to maintain $30,000.
This has resulted in a significant increase in BTCUST (Not Bitcoin valued in dollars, but valued in the UST stablecoin). pic.twitter.com/Xn7qcy4VMZ
May 10, 2022 — Blockchain Backer (@BCBacker)
On social media, rumors of a complete collapse at Terra quickly circulated. Despite this, Do Kwon, the firm’s outspoken co-founder, remained composed upon the announcement of the massive BTC liquidity injection.
Jose Macedo, Founding Partner at Delphi Ventures, tweeted a synopsis of the scenario, arguing that Terra’s contingency measures will eventually lead to increased decentralization of the crypto industry’s biggest decentralized USD stablecoin.
“Haters will accuse this of centralization, and they will be correct for the time being. $UST is now more resilient, but temporarily more centralised, thanks to @LFG Reserve “On May 9, he wrote.
Wallet balance of Terra NGO, the Luna Foundation Guard (LFG), went from 70,000 BTC ($2.23 billion) to 0 BTC, according to data from on-chain monitoring site BitInfoCharts.
Bitcoin wallet Luna Foundation Guard (LFG) (screenshot). BitInfoCharts (source)
$35,000 is up for grabs.
Despite this, BTC/USD has recovered from its own slump and is again trading at $32,000 as of May 10.
As the price of Bitcoin drops to new lows, professional traders are taking a hands-off attitude.
El Salvador’s President Nayib Bukele confirmed the purchase of 500 BTC at an average price of $30,744, indicating that some were prepared to “buy the dip.”
“I’m not sure how far the markets will correct, since another outlier of the LUNA UST peg is contributing to the dip,” Cointelegraph writer Michal van de Poppe said tonight.
“All I know is that the UST peg is a one-time shock, and I expect Bitcoin to trade around $35K in the next 24-48 hours.”
At the time of writing, the “shock” had not subsided, with UST trading at 8% below USD parity. Terra’s LUNA coin was trading at $32 after losing almost 50% of its value in only 24 hours.
1-day candle chart for LUNA/USD (Binance). TradingView (source)
According to a Twitter poll conducted by famous analyst Benjamin Cowen, the majority of over 12,000 respondents thought the peg will be reinstated in the end.
The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.
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