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Opinion | A cryptocurrency collapse shows what's behind every scheme – The Washington Post

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Fool me once, shame on you. Fool me twice — well, that’s exactly what keeps the cryptocurrency game going.
The collapse this month of digital tokens and exchanges featured a lot of names even laymen would recognize: bitcoin, Coinbase, ether. But the players perhaps most responsible for turning a slow decline into a plummet aren’t nearly as well known. The implosion of so-called stablecoin terraUSD and its sister coin luna show what all crypto schemes rely on: faith.
South Korean entrepreneur Do Kwon hawked terraUSD as an innovation that would transform the industry. Stablecoins are supposed to be exactly what their name implies: stable. They’re pegged to the value of an existing currency, usually the dollar, so that buyers can always exchange them at a 1-to-1 rate. Traditionally, their value is backed by a reserve including more reliable assets such as cash and treasuries — themselves backed by the full faith and credit of the United States.
Not so for terraUSD. TerraUSD is backed instead by … wait for it … an algorithm.
Kooky as this concept sounds, in the end it’s rooted less in complicated computer science than in good, old finance. TerraUSD was tied to a newly minted cryptocurrency (but not stablecoin) also controlled by the Terraform Labs company, called luna. To put things much too simply, the tokens’ creators linked terraUSD to luna in such a way that, when high-frequency traders eager to earn an easy buck sold back and forth between the two, luna’s price would fluctuate while terraUSD’s value would hold more or less steady.
This is arbitrage theory, and it works as long as the traders keep trading. The problem is, the traders will only keep trading as long as they think there’s money to make. That means they had to think luna was actually worth something, which, thanks to an unfortunate confluence of factors, eventually they didn’t. And so the whole shebang crumbled to pieces.
TerraUSD operated, basically, on blind conviction. No sovereign state vouched for it, nor did a vault full of gold. People were simply asked to believe in terraUSD’s stability — and as soon as they didn’t believe in its stability, it became unstable. But cryptocurrencies and other digital assets that aren’t marketed as stablecoins depend essentially on the same thing: an always-churning hype machine that sucks in at least as much dough as leaves it.
The trouble is, the truest of true believers tend to be the ones who lose the most, because they stick around the longest — while the savvier (and somewhat more cynical) realize when to get in and when to get out. You can roll your eyes at basketball stars spending hundreds of millions of dollars on digital images of cartoon apes in human clothing, and you probably should. But look at tweets and Reddit postings from small-timers who put a year’s worth of paychecks into luna and encouraged their pals to do the same, or funneled their grandma’s retirement into ether. You might shed a tear instead.
Members of the cryptocurrency crowd, when accused of having been suckered into a Ponzi scheme of untold proportions, love to cry “community.” They claim they aren’t trusting merely in the monetary value of a token branded with a silly name and secured by “algorithm,” but rather that they’re trusting in the societal value of building a better system and a better world — and most important, the value of building it together. The real financial revolution, in other words, is the friends we’ve made along the way. Maybe so — but community has been key to plenty of historical pyramid plots. Why go to a Tupperware party but to meet like-minded housewives with whom to break bread and sell polyethylene plastic?
People will always be looking for community, and they’ll always be looking for money. Case in point: Luna 2.0 debuted last weekend to avenge its fallen predecessors. To draw investors in despite disgrace, Terraform Labs is conducting what’s known as an airdrop: putting free luna 2.0 into the wallets of original luna and terraUSD holders, to help them recoup their losses. Which they can only do, of course, if luna 2.0 becomes worth something. Better not sell just yet, then.
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Bitcoin Is '100 Times Better Than Gold,' Michael Saylor Says – Here's Why | Bitcoinist.com – Bitcoinist

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Bitcoin and gold are both valuable assets that can be used to protect against inflation; nevertheless, there are important differences between the two in terms of their history, accessibility, and other sources of demand.
Gold, undoubtedly, has a lengthy history and solid basis, while Bitcoin has barely more than a decade of existence to prove its worth as an inflation hedge.
In November of last year, the price of a single BTC soared beyond $65,000, setting a new record high. This increase was related to the introduction of a Bitcoin exchange traded fund in the United States; while others during the year were due to events involving Tesla and Coinbase, respectively.
As of this writing, BTC is trading at $$19,058.84, down 5.5% in the last seven days, data from Coingecko show, Sunday.
Despite the fact that BTC has lost over 73% of its value since its all-time high in 2021, crypto bull and MicroStrategy co-founder and CEO Michael Saylor is unfazed.
Not only does he think the digital coin will regain its former glory, but he also thinks the cryptocurrency has a lot of room to grow beyond its current high point.
While the value of the most popular cryptocurrency in the world has been falling in recent weeks, MicroStrategy has been buying the dip. With 130,000 BTCs in its vault, it is sitting on nearly $4 billion of the crypto.
“I think that the next logical stop for Bitcoin is to replace gold as a non-sovereign store of value asset and gold is a $10 trillion asset as we speak. Bitcoin is digital gold, it’s 100x better than gold,” Saylor said during the Money Festival hosted by MarketWatch on Wednesday.
Bitcoin has a market cap of around $365 billion, according to data by TradingView on Sunday.
And during the festival’s Best New Ideas segment, Saylor didn’t hold back when he predicted the crypto’s price tag may reach $500,000 within the next decade.
“The half-life of money in crypto is forever. You can move it on billions of computers at the speed of light. So if Bitcoin goes to the value of the yellow metal, it’s going to $500,000 per coin, and I think that happens this decade,” Saylor pointed out.
According to MarketWatch, Saylor has around 17,732 Bitcoins that he purchased for around $9,500. Meanwhile, MicroStrategy’s stock price has fallen almost 65% this year, just like Bitcoin.

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Freelance writing is Jet’s other cup of tea. When not on his computer, he unwinds with a cold bottle of beer and laughs with his son over cartoons. Other than that, he’s just like everybody else who wants to be happy with their life.
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Cryptocurrency prices today under pressure: Bitcoin falls 3%, ether 6%; Uniswap gains | Mint – Mint

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  • The global cryptocurrency market cap today remained below the $1 trillion mark

Cryptocurrency prices today came under pressure after the US Federal Reserve delivered another big interest-rate hike and warned of economic pain from the aggressive policy tightening still to come. The Fed’s determination to raise rates to levels that hammer inflation at the cost of sliding asset prices sent a chill across global markets.
Bitcoin, the world’s largest and most popular cryptocurrency, was trading more than 2% lower at $18,627, came close to dropping below $18,000 level. The global crypto market cap today remained below the $1 trillion mark, as it was down over 2% in the last 24 hours at $943 billion, as per CoinGecko. On the other hand, Ether, the coin linked to the ethereum blockchain and the second largest cryptocurrency, continued to underperform and fell more than 6% at $1,260.
“Bitcoin, Ethereum, and most cryptocurrencies traded lower on late Wednesday after the Federal Reserve raised interest rates by 75 basis points marking the third consecutive time this year. BTC continues to struggle below the $19,000 since bears are more powerful than bulls in the market. The second largest crypto, Ethereum was seen changing hands above the $1,200 level. The price of ETH has been dipping since the Merge took place as miners continued to dump their ETH in the market coupled with macroeconomic factors. If the selling pressure from miners increases, ETH is likely to fall below the $1,000 level,” said Edul Patel, CEO and Co-founder of Mudrex.
Meanwhile, dogecoin price today was also trading about 3% lower at $0.05 whereas Shiba Inu slipped more than a per cent to $0.000011. Other crypto prices’ today performance also declined as XRP, Stellar, Solana, Polygon, Avalanche, Binance USD, Polkadot, Litecoin, Apecoin, Cardano, Chainlink, Tron, Tether prices were trading with cuts over the last 24 hours, whereas Uniswap gained.
Such a backdrop offers little respite for crypto markets. They were already reeling from a $2 trillion plunge from a 2021 record high, an unraveling pockmarked with blowups such as the Three Arrows Capital hedge fund and the Terraform Labs project — whose co-founder Do Kwon is wanted by authorities.
(With inputs from agencies)
 
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Bitcoin's Accumulated Momentum Is Going To Be Hard To Stop – Bitcoin Magazine

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While "the smartest people in the room" scan the horizon, bitcoiners are out there actually building the future they want to live in.
The below is a direct excerpt of Marty's Bent Issue #1259: "Bitcoin is action. The accumulated momentum is going to be hard to stop." Sign up for the newsletter here.
This morning I listened to a recent Macro Voices podcast with Brent Johnson from Santiago Capital. It was a very good conversation about the state of the global economy, particularly focused on the dollar's relative strength against other currencies and how things may play out as the dollar continues to strengthen as prophesied by the "Dollar Milkshake" theory. Here's a link to the episode for those interested.
Toward the end of their discussion Erik (the host) and Brent make it clear without saying anything explicitly that it is insane that global markets are essentially beholden to the whims of a very select few people, central bankers, out of the billions who are alive on this planet. The fact that the world hinges on the cryptic language of people who are completely disconnected from reality and do not suffer the consequences of their actions is a bit baffling. With that being said, what I'd like to focus on is the fact the Erik and Brent ended their conversation with a brief detour to discuss the next world reserve currency. Both gentlemen acknowledged that it would likely be a cryptocurrency – likely produced by one of the governments or a coalition of governments – and will certainly not be bitcoin.
To your Uncle Marty, this is an incredibly hilarious line of thinking from a couple of individuals who seem to "get it" in regards to the fact that the fiat system is doomed for failure and it's failure is being driven by incompetent central planners. To think that the solution to bad central planning from an incompetent group will be better central planning from the same group via a fresh slate a CBDC or something like it would provide. Even funnier is the fact that they emphatically proclaim that bitcoin most certainly will not become the dominant money in the world while deriding "bitcoin maximalists". This is our edge, freaks.
While "the smartest people in the room" scan the horizon waiting to place their bets on something that hasn't materialized yet and is sure to end in failure if it ever does because it will suffer from the same centralized attributes that doomed the dollar, bitcoiners are out there actually building the future they want to live in. The macro mensches of the world can continue to sit on the sideline and pontificate about what they think will come to market. Bitcoiners will continue to act and bring their distributed, censorship resistant, sound money to market. And the headstart bitcoin has amassed is approaching insurmountable. It is a step-function improvement on the incumbent monetary system in every way.
It's provably scarce and extremely hard to change.
You can send it over the internet.
You can divide more granularly.
It is extremely hard to prevent someone from receiving or sending bitcoin if used correctly.
And, what might be the most underappreciated aspect, it is beginning to become an integral part of the energy sector. And as we're finding out now energy is pretty damn important. Arguably the most important asset on the planet. Bitcoin becoming an essential for energy producers makes it significantly harder to kill from a logistical and political perspective.
We are so early.

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