CRYPTOCURRENCY MARKET CONTROVERSIES - 10% to @Tron-Fan-Cub
Hello everyone and welcome to my blog.
The entire cryptocurrency market has been in great decline due to the recent dump on UST and Bitcoin following a Wormhole hack on UST.
A lot of misconceptions and theories have been brought up in trying to explain what happened. Some even made mentioned that it is a fight between those who believe in the centralized method of pegging stable coins to US dollar which involves using dollars in bank accounts as a reserve (eg. USDT & USDC) and those who believe in the algorithmic method of pegging which involves using other cryptocurrencies as reserve together with a mint and burns mechanism thus making it more decentralized.
The above claims were also kind of justified following a tweet made by Justin Sun on the day of the Luna crash.
- See below.
The above tweet made it appear as though it was actually a fight between the two parties because Justin's just launched stable coin USDD which uses Trx as reserve also follows the same algorithmic pattern of pegging to USD similar to TerraUSD for when USDD goes below $1, users will transfer 1 USDD and receive $1 worth of Trx and vice versa.
This controversy further increased when the price of USDT went down and has stayed below $1 for some days now.
- See below
This drop from 1 dollar peg appeared as though it is retaliation from the algorithmic parties but more can be gotten from this.
Being not the first time USDT has slightly gone below $1 it is safe to say that its slight decrease is a result of a massive shift in demand from USDT to BTC as a result of investors trying to take advantage of the current low made by the coin.
The above claim can be justified by seeing that BTC has recently moved from its low of $27,900 to $30,400 in the last 24 hours.
- See below
Furthermore, the drop in USDT could be a result of panic by holders following what happened to TerraUSD although certain claims said that most liquidity pools were almost empty thus leaving USDT holders with no means of swapping.
Left for me, I would say that nothing is certain in the current cryptocurrency market due to lots of claims and controversies going on and until anything is apparent, we should all trade with caution and invest with proper risk management.
That's all from me for now.
See you next time..
You have discussed the cryptocurrency market very well. Your post is really important. Thank you so much for sharing this post with us.
I'm glad you liked the post.
Thank you for your appreciation.
Please @irawandedy I think you mistakenly skipped my post.
Or is there a reason for that?
Don't be offended that I tagged you🙏🏽
be patient... I'm waiting for the voting power and back to work in a few minutes. I'll check it if it's worth it, will get your rights
Thank you so much for understanding.
Tweet link
https://twitter.com/EbullientSrr/status/1525084635075682305?s=19
Gave a very good idea about the cryptocurrency market. I was able to learn a lot by watching that. Thank you for sharing such a beautiful post with us. Good luck to you.
I'm glad the post made sense to you.
Thank you.
What they are trying to do is eliminate centralized system completely from stable coin, the mechanism looks great, but now the centralized system had showed how powerful and rich they are by dumping UST and this affected LUNA price and we have wintness a fine and incredible project varnish within 48 hours.
That's a logical conclusion. The introduction of UST became a threat to the entire centralized stablecoins and seeing that it has lead to the birth of another algorithmic stable coin USDD, doubled the threat thereby forcing them to act fast by dumping UST which lead to over minting and dumping of Luna.
Like I said, the above assertion is logical but there's nothing certain as to what is currently going on thus making the whole thing controversial.
It is really good post bro. Thanks for sharing.best of luck.
Thank you for appreciating my post.
I'm glad you liked it.
Great discussion on the current cryptocurrency trend. Best post for me today so far
I'm glad you liked the post.
Thanks for appreciating it.
Yeah that's right mate, this is also our chance to buy coins at the lowest value.
You have a point but we shouldn't forget about risk management.
Thank you @irawandedy. I appreciate