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Are Small Cap Crypto Assets Rebounding A Sign Risk Appetite Returning?

The crypto market just saw some slight recovery, but the performances are upside down. Opposite to the way sellouts usually play out, the Bitcoin dominance dropped dramatically as the asset is underperforming the Small Cap index. From last November’s $3 trillion market cap, the crypto market is now down to around $800 billion: Smaller Altcoins Make A Strong Comeback Last week the crypto market saw its bottom, followed now by some slight recovery. As per Arcane Research’s latest weekly report, the smaller altcoins have also been seeing red numbers with the Small Cap index shedding 27%, but it has been the best performer overall. In contrast, Bitcoin had dropped 35%. Through this small window of relief during June, we have seen the blue-chip coin underperform all other indexes. As a result, BTC’s dominance in the market fell -1,51% this week to 43,5% while Ether fell -0,31. The latter has been declining since May from 19.5% to 15%. What’s Making This Crypto Winter Colder The report notes that the primary driver of this crypto crash has been the hedge fund Three Arrow Capital (3AC) collapse. Having invested over $200 million in Luna Foundation Guard’s token sale, 3AC’s liquidity ended up being wiped out and its margin call was the last straw for the already pressured market. Related Reading | How Long Will The CryptoWinter Last? Cardano Founder Provides Answers As per the Wall Street Journal, the crypto hedge fund hired legal and financial advisers to help work out a solution for its investors and lenders. The firm is looking for a way out, “including asset sales and a rescue by another firm”. The prognostic is not very positive at the moment, seeing the wave of liquidations and mitigations of losses by crypto exchanges that have followed the collapse. “We were not the first to get hit…This has been all part of the same contagion that has affected many other firms,” Kyle Davies, 3AC’s co-founder, said in an interview. Arcane Research explained that “In periods of insolvency, creditors unwind the most liquid assets first, which is likely the root cause of BTC and ETH’s relative underperformance in the last week.” The report adds that “illiquid altcoins are more challenging to sell at size, particularly during pressuring times, which explains why smaller coins have experienced less excessive selling pressure in the last week”. Meanwhile, Microstrategy CEO Michael Saylor described the events around this winter as a “parade of horribles” in which the consequences of lack of regulation in the crypto field have made it possible for wash trading and cross-collateralized altcoins to weigh down on Bitcoin. “What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-collateralized with Bitcoin.” “The general public shouldn’t be buying unregistered securities from wildcat bankers that may or may not be there next Thursday,” Saylor added, slamming at the recent collapses and suggesting that future actions by regulators could prevent the level of volatility that BTC is now experiencing. Related Reading | Crypto Investors Find Safety In Stablecoins, Bitcoin, Ditch Altcoins En Masse

Crypto News

Crypto Meltdown Calls for a Decentralized Compliance Layer to Protect User Interest

Over the last few weeks, the cryptocurrency market has been rocked by extreme volatility. There has been a steep decline in the price of digital assets. Such has been the meltdown in that the entire market cap has fallen under $1 trillion, which surpassed the $3 trillion mark at the peak of the bull cycle. Being a nascent market means high volatility is a common phenomenon at this stage of growth. That said, this volatility has made crypto so attractive to investors and speculators. However, volatility doesn’t always mean just a significant upside but also a remarkable downside. And that’s what we are seeing in this fourth crypto cycle, so all this carnage is not unprecedented. In fact, a 70% to 80% drop in Bitcoin and Ether prices from their all-time highs can be seen as a golden ‘buy the blood’ opportunity to plan for the future with a focus on research and only investing what you can afford to lose. However, we also witnessed this time that the significant drawdown in the crypto prices was exacerbated by the lack of proper risk management practices adopted by some of the biggest names in the industry. Extreme Market Conditions One of the biggest centralized lenders in the crypto space, Celsius Network, was among this torrent of bad news as it abruptly froze customer withdrawals, swaps, and transfers between accounts due to what it said were “extreme market conditions.” This pause in withdrawals resulted in more volatility and raised concerns about Celsius’ solvency. It was a liquidity issue, according to the experts, a classic banking problem. Just late last year, Celsius Network raised $400 million in a Series B funding round at a valuation of $3.5 billion. Back in October, the crypto lender had $25 billion in assets from more than 1.7 million users, which fell to around $11.8 billion as of last month. Besides spooking investors and the market, this is catching the attention of the administration and lawmakers during times of economic uncertainty, including high inflation and global market instability. State securities regulators in Washington, Alabama, Texas, Kentucky, and New Jersey are now investigating Celsius Network’s decision to suspend customer redemptions this week. It is expected the proposed regulations to regulate stablecoins by the President Working Group could extend to the entire crypto space in order to “mitigate the risks of these assets.” The PWG report calls for federal regulatory oversight, restricting institutions from lending customers’ digital assets out, and compliance with liquidity and capital requirements. Need for a Better Solution Much like a bank, the centralized lender Celsius was using the crypto deposits from over a million retail customers and investing them in the crypto market, including DeFi but did not apply proper risk management or provide any safety measures to its users. Thus, the market needs a truly decentralized solution that doesn’t obscure how they deal with their funds. Astra protocol is one such decentralized solution that provides a compliance layer for the Web3 economy. In the DeFi sector, undercollateralized loans have been gaining traction. Still, while they offer the benefit of no central control, they carry considerable risks in terms of a lack of asset liquidity and instant payment. Astra’s truly decentralized project onboards traditional players for funding, allowing for lending on the Astra network, and eliminating the need for these under-collateralized loans. By converging the power of Web3.0 and traditional financial ecosystems, Astra Network aims to create the next iteration of decentralization and become the largest network in the industry. Zurich, Switzerland-based Astra basically allows protocols to comply with society’s numerous regulations without giving up the benefits of decentralization or putting investors at risk. Decentralized Compliance Layer Amidst the mainstream global adoption of crypto and the regulatory challenges coming its way, Astra has designed its network to be the only fully KYC (know your customer) compliant decentralized blockchain ecosystem which is available worldwide with the protocol performing all compliance practices. This regulatory compliance is offered across a vast number of DeFi protocols to reassure users that their investments are completely protected while preserving their anonymity. The Astra network further offers its infrastructure to countries and their treasuries to issue financial products such as regulated and sustainable CBDCs bonds and financial instruments while taking advantage of the incredible yield available through digital assets. To achieve this, Astra has equipped all DeFi smart contracts with a fully decentralized compliance layer, including KYC & AML capabilities, and leveraging the expertise of trusted legal firms to resolve real-world compliance issues. To provide the best KYC/AML services available, Astra has developed a unique Decentralized Legal Network (DLN), an ecosystem that contains major, global legal and audit firms. In terms of consensus mechanism, the system that allows distributed systems to work together and stay secure, Astra is using the environmental-friendly Proof-of-Stake (PoS), which is the perfect fit to build a real-world solution for billions of users through its improved scalability and increased transactional throughput. A Vast Network Compliance is not the only feature offered by Astra. The project provides several other services, including enhanced vetting, a dispute resolution platform, AML, and reporting for process feedback and improved procedures. The demand for these services is increasing rapidly as the crypto market continues to onboard more and more people and capital invested in the sector skyrockets. Not to mention all the challenges faced by the industry, such as lack of certainty for smart contracts, recurring derivative contract disputes, high legal risks in connecting real-world assets to the blockchain, and poor management of claims disputes on-chain. Astra here certainly has the potential to gain market fit with its customizable services that offer security in retrieving incorrect transactions, create secure escrow accounts to prevent unexpected withdrawals, provide a decentralized legal layer for user protection, and equip insurance protocols with an in-built claim verification tool. Overall, with its KYC, KYB, and AML services for decentralized organizations, Astra aims to ensure that all DeFi and crypto platforms keep pace with the ever-changing regulatory landscape.   Image by Gerd Altmann from Pixabay

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BlockFi Mentions That It Liquidated Three Arrows Capital, Here’s What We Know!

Crypto Lending Platform BlockFi has confirmed via a tweet that despite “best business judgement” it had to liquidate a “large client”. This decision was primarily taken in order to alleviate risks which are in accordance with the contracts including specific counterparties. According to reports, BlockFi is one of the many companies that were a part […]

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Starling Bank Boss Attacks Crypto Despite Fintech’s ‘Crypto-Friendly’ Status

Anne Boden is more than skeptical about crypto, as she criticizes their use worldwide. The Goldman Sachs-backed digital bank’s CEO has gone head-on against cryptocurrencies, warning users to refrain from digital assets. Established in 2014 by Anne Boden, Starling bank is a digital bank that provides loans and chargeless financial services via a mobile app. […]

Blockchain Crypto News

Report Reveals Terra Holders Liquidated Their Holding When Crash Started

The Terra LUNA crash last month sent many investors back in their returns. The crypto market generally crashed the previous month, but the 80% deep dive in Terra wasn’t funny. The panic by the investors to pull out of the crypto crash intensified the fall of many coins. Generally, the crypto market suffered a loss estimated at $400 billion in a few days. Surprisingly, a new report has emerged showing that while the Whales were dumping their holdings, the retailers were busy buying up Terra. According to the Terra investor who made the report, many smaller wallets were stocking up the coin amid the panic. New findings that many withdrawals and swaps were going on. Most of the outflows were going on Terra’s Anchor Protocol during the early days of the crash in May. Related Reading | Bitcoin Exchange Outflows Suggest That Investors Are Starting To Accumulate The Terra crash caused a lot of pain in the crypto market. According to the Policy head at Blockchain Association, Jake Chervinsky, the crash week was one of the most painful days in the history of cryptocurrency. Diverse Reasons For Terra Crash Many people have speculated several reasons for the crash. But one glaring reason is the operations of the Terra’s Anchor Protocol. According to how stablecoins operate, they’re backed by reserves which should always be adequate to pay off investors even if they all pull out at the same time. But UST is a stablecoin that operates with algorithms relying on code. This coin needs continuous market activities and the belief that it is pegged to the dollars to work. Also, many people trusted the link to its base currency, LUNA. So when Anchor Protocol, owned by Terra, came up with a 20% return on lending six months ago, investors rushed in to cash out the ample opportunity. The UST started seeing massive purchases as all the investors targeted the 20% returns. Of course, many critics called it a Ponzi scheme, and even the Terra team members acknowledged it but argued that it was a means of creating awareness for the protocol. Related Reading | Bitcoin Rests Tentatively Above $31,000, Bull Rally Or Trap? Unfortunately, many large investors decided to pull out their investments to make big money through short-selling. As a result, UST depegged from the USD. Many people panicked and wanted to get all their earned interest out before a further crash. This bank-run also crashed Luna and brought UST to 12 cents and Luna to fractions of a penny. One other reason for the Terra crash might be attributed to the crypto sentiment that was going on following the Federal Reserve’s rate increase. Also, the increasing inflation affected the market at that time too. So, there were a lot of issues going on, and people were already worried about the hope of crypto investments. Terra Luna’s crash also facilitated the already tethering crypto market crash. Even the attempts by small depositors to increase their holdings on Anchor didn’t work because their overall liquidity is just a fraction of what is needed on the protocol. Featured image from Pixabay, chart from

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Liminal raises $4.7M in seed round to grow cross-chain automated wallet infrastructure

Liminal, a cross-blockchain wallet architecture with MPC and MultiSig, announced it has raised $4.7 million in its seed funding round led by Elevation Capital. The round also saw participation from prominent investors like LD Capital, Woodstock, Nexus Ventures, and crypto ventures like CoinDCX, Hashed, Cadenza Ventures, Vauld, Better Capital, and Sparrow Capital. There were also […]

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Crypto Analyst Predicts for Rallies for Binance Coin (BNB), Solana (SOL) and One Additional Ethereum (ETH) Rival

A popular altcoin trader is predicting rallies for Binance Coin (BNB) and two Ethereum (ETH) challengers including Solana (SOL). Pseudonymous crypto strategist Altcoin Sherpa tells his 176,000 Twitter followers that BNB, the utility token of crypto exchange Binance, is one of the strongest altcoins in the market right now. “BNB: Trade idea, wait for a […]

The post Crypto Analyst Predicts for Rallies for Binance Coin (BNB), Solana (SOL) and One Additional Ethereum (ETH) Rival appeared first on The Daily Hodl.

Bitcoin Crypto News

Bitcoin Price Could Fall To $8,000, Says Guggenheim CIO

Hearing more negative speculation would be unpleasant for the investors as the recent bloodbath’s catastrophic effects already slowed down crypto markets. But unfortunately, an expert predicted Bitcoin would go far below. Scott Minerd, Chief officer at Guggenheim Partners, a global investment and advisory firm handling $325 billion under its management, speculated that the Bitcoin price could plummet to $8,000. He is the same man who once said in December that “Bitcoin price should be $400,000.” Related Reading | XRP Has Broken Below Its Long-Standing Support, What’s Next? The speculation refers to a nearly 70% drop from today’s price of BTC, fluctuating around $30,000. BTC Could Fall With The Fed Being Restrictive Speaking with the CNBC’s Andrew Ross Sorkin in an interview held on Monday at World Economic Forum, Switzerland, he said; When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive. Minerd highlighted the relationship between BTC price and Fed regulation and tightening policies. Following its previous high of November 10, when BTC’s price marked $69,044, it decreased by around 58% of its value. “Most of these currencies, they’re not currencies, they’re junk,” he added, saying that “I don’t think we’ve seen the dominant player in crypto yet.” Comparing the current situation with the dotcom bubble of the early 2000s, he said; “If we were sitting here in the internet bubble, we would be talking about how Yahoo and America Online were the great winners,” adding that “Everything else, we couldn’t tell you if Amazon or was going to be the winner.” In addition, he urges that digital currency is required to store value. As well as, become a medium of exchange and a unit of account. “I don’t think we have had the right prototype yet for crypto,” said Minerd. Investors Seem Hesitant To Buy Bitcoin Dips The collapse of stablecoins, including TerraUSD (UST) and its fellow token Luna, has caused the market to suffer a severe blow. Edward Moya, an analyst from the well-known forex and CFD trading platform of America, OANDA, has commented that Bitcoin prices are steadied even with the broad risk rally on Wall Street. He added; It looks like most crypto traders are hesitant to buy the dip. Which most likely means that the bottom has not been made. Moreover, Moya talked about the European Central Bank President Christine, who previously said digital currencies are “worth nothing.” Related Reading | Solana (SOL) Could Register An Upswing, Thanks To This Pattern “It is unlikely that any head of a central bank will endorse bitcoin or the other top coins. Especially as we are years away from a digital euro or dollar,” Moya stated. “It looks like bitcoin won’t really attract massive inflows. Until investors believe most major central banks are nearing the end of their tightening cycles.” He speculated that giant coin prices will possibly remain choppy this summer.  Featured image from Pixabay and chart from

Bitcoin Crypto News Ethereum

Liquidations Settle As Bitcoin Regains Footing Above $30,000

Bitcoin had been recording massive liquidations since the digital asset had dropped from $40,000. The majority had been dominated by long liquidations as hundreds of thousands of traders saw their positions liquidated. However, since the price of the cryptocurrency has begun to settle around the $30,000 level, the liquidations have now also started settling. Leading […]