In the western finance of crypto assets to which the rules do not apply, old world lenders have much longer teeth than young Bitcoin millionaires. And the party has just begun.
Would you like to read again in Le Parisien how young workers regularly bought Bitcoin and made a lot of money? Or other ciphers like Terra / Luna? Rather, is it an article about the economic loss of the abyss created by this speculation that has no basis other than greed?
Terra / Luna: 99.8% decrease in value in one day
The incident has been closed. No one really knows the details of the origin of the stablecoin TerraUSD crash related to the US dollar, except that it was unbearable. Deserves the worst scenario in the classical financial world. As in the old world, the entire system is based on investor trust. Therefore, the curse and criticism of the crypto world against banks, regulations and the financial crisis is the same on the crypto side.
Stablecoin that is not really stablecoin
So-called stablecoin is sending a shock wave through the cryptocurrency market, wiping out billions of its values and crashing liquid cryptos such as Bitcoin. Two major stablecoins in the crypto project Terra have fallen free, and there is also an incident called the Ponzi scheme, similar to the collapse of Lehman Brothers that caused the 2008 financial crisis. Stablecoin whose equivalent to the dollar is covered by financial counterparties has no exchange to survive and no link between the two worlds is possible. Stablecoins claims to be a relatively secure haven in the highly volatile crypto market. They are supposed to be pegged into fiat currencies and generally maintain a one-to-one peg in the US dollar. However, recent events have proved that they are as volatile as any other cryptocurrency, confirms Euronews’ Pascale Davis.
Terra, the cryptocurrency to hold …
Terra is ranked in the top 10 of the most valuable cryptocurrencies, peaking near $ 120 (€ 115.28) last month. Meanwhile, TerraUSD’s sister token, Luna, fell more than 97% on Wednesday to below $ 0.22. On Friday, Luna crashed near $ 0.
How did this accident happen?
Created by Terraform Labs, UST is an algorithmic stablecoin. That is, instead of holding cash or other assets in reserve to back up the token, a complex combination of code and Luna is used to stabilize the process. Cryptography is full of deceptive people who are convinced that Ponzinomics has a lot of money, and even if these other fools lose their money they will be rich.
“” The idea of the algorithm Stablecoin is to use some sort of messy, poor quality bank pool instead of using a backing pool. This is a way to pretend to be building something stable from something unstable. “The author of the book, David Gerald, said 50ft blockchain attack.. “”Luna was supposed to be a governance token. This is a way to pretend that the invented Pongee Money is not Pongee Money.“, He told Euronews Next.
Things got even more complicated after Terra creator DoKwon bought $ 3.5 billion worth of Bitcoin to support UST in times of crisis. Kwon’s Luna Foundation Guard later tweeted that he was withdrawing and lending 37,000 Bitcoins (valued at over $ 1 billion (at current prices) of over $ 1 billion). The company said that “a very small amount” of borrowed Bitcoin was used, but “currently used to buy” UST. Many are afraid that Luna Foundation Guard will sell off much of Bitcoin to support UST. “I think the compelling part of this story is that they themselves were hit by a bit of a financial crisis in 2008,” Gerald said.
Back to 2008
“” In the 2000s, when money was big, people had so much money that they couldn’t even invest fast enough. What did they say is safer than real estate? Real estate has not fallen. Now let’s bet on mortgages and mortgage-based loans.And you had an equivalent backed by a derivative of the price of this house “, He added. Except for the fact that they made a bit of 2008, the key to the US story is … everyone knew it was nonsense. Of course, home prices. Has gone down, and all those safe dollar equivalents have gone down with them, and then everyone who depends on them has gone down. Gerald said it was almost the same as what happened at Terra. rice field. “”It was based on nonsense and was guaranteed against Bitcoin.It crashed because it was enough to lower the price of Bitcoin and all the other ciphers were correlated.“Did he declare?
The tether wobbles but does not fall
But Terra saga not only lowered Bitcoin and Ether prices, but also fell to $ 0.98 on Thursday and is believed to have another $ 1 peg, Tether, the world’s largest stablecoin. Also lowered. Tether relies on a variety of assets, including commercial paper (a form of unsecured debt), to back up tokens.
Testimony of financial loss on social networks
Greed is crazy. How can I put all my savings in crypto? Do you need to be absorbed in it? “”I lost all my savings“Can I read it on Reddit?”I lost over $ 450,000 [433 000 €]Can’t pay to the bank“I posted another forum user.”It was clearly nonsense.But cryptocurrencies are full of foolish people who have a lot of money in Ponzinomics and are confident that these other fools will be rich if they lose money.“.