Terra’s collapse forced cryptocurrency investors to ask a question they never thought was possible: Will TerraUSD (UST) or Terra (LUNA) reach $1.00 first? The magnitude of this question is a sobering reminder of how quickly things can change in crypto. While Terraform Labs co-founder Do Kwon remains defiant, many people in the industry are starting to move away from the protocol they believed provided the real-world utility for stablecoins and Bitcoin (BTC).
The threat of contamination from Terra’s apparent collapse could take months or even years to fully quantify, but it seems the crypto winter’s howl is getting louder. Fortunately, blockchain projects are started with tens of billions of dollars. They will keep building. Can you wait a little longer before completing your thesis on investing in digital assets?
Celsius Network executives deny rumors of significant losses amid market volatility
The fallout from the UST/LUNA fiasco has cast a negative spotlight on Celsius Network, a crypto-focused wealth management platform that has reportedly been “wiped out” by the events of the past 72 hours. But nothing could be further from the truth, the Celsius leadership team confirmed on Wednesday. Rod Bolger, the company’s chief financial officer, told Cointelegraph that “we are not exposed to market fluctuations in any significant way,” including the crypto crash caused by LUNA. CEO Alex Mashinsky also tried to set the record straight.
Despite the extreme market volatility, Celsius has not suffered significant losses and all funds are safe.
— Alex Mashinsky (@Mashinsky) May 11, 2022
FCA Regulated Fasanara Capital Raises $350 Million Crypto and Fintech VC Fund
If you had read anything other than Terra news this week, you would have known that a prominent investment firm in the UK has raised $350 million for a new crypto and fintech venture capital fund. Fasanara Capital, which manages $3.5 billion in assets, has identified Web3 and crypto as a major investment opportunity — so much so that it plans to make bigger commitments to startups than traditional venture firms. Venture firms don’t care about crypto market cycles. They just want to build as much equity in the industry as possible.
Latin America’s Largest Digital Bank To Allocate 1% To BTC And Offer Crypto Investment Services
A digital bank in Brazil with exposure to more than 50 million customers invests 1% of its net assets in BTC and makes it easier for people to buy, sell and store digital assets. Nubank, the largest neobank in Latin America, announced this week that it is partnering with Paxos to realize its crypto ambitions. CoinTelegraph has been reporting for years that Latin America is an emerging crypto hub. If you’re nervous about the market, check out what Nubank’s executive team has to say about crypto’s potential in the region.
Michael Saylor Calms Investors After Market Slumps Hurt MSTR, BTC
With Bitcoin dropping below $30,000 — and MicroStrategy’s average BTC cost base — CEO Michael Saylor reassured investors that his crypto-heavy business intelligence firm was not at risk of being margin-called. Saylor said it would take a collapse in Bitcoin price below $3,600 before the company had to place other collateral. Crypto Twitter has already accused Saylor of secretly selling some of its BTC stock. That is not true and neither is the rumor that MicroStrategy is going bankrupt because of its Bitcoin reserves.
MicroStrategy has a $205 million term loan and must hold $410 million as collateral. $MSTR has 115,109 BTC that it can pledge. If the price of #BTC falls below $3,562, the company could place another collateral. See slides 11-12 in the Q1 2022 presentation. #HODLhttps://t.co/9WHsIB6Usx
— Michael Saylor⚡️ (@saylor) May 10, 2022
Can you tolerate more LUNA analyses? Watch this video
The Market Report panel met outside normal hours this week when I spoke about Terra Luna with fellow analysts Jordan Finneseth, Marcel Pechman and Benton Yuan. We talked about what exactly went wrong with the Terra ecosystem, how UST lost its link and what this could mean for your portfolio over the next 12 months. You can watch the full replay below.
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