TL;DR
- Jay Powell’s unwavering commitment.
- 😴 Markets: Thursday’s wake-up call (Options expiration)
- How to prepare for Terra 2.0.
- Portugal’s battle for crypto tax exemptions
Powell’s Commitment
If there’s one word that could describe Jay Powell and the Federal Reserve, it’d have to be COMMITTED; whether that’s to making money printer go brrrr, or more recently, taming inflation by any means necessary.
FED chair Jay Powell reiterated his hawkish stance during the FOMC minutes today and renewed vows to move with multiple 50 basis-point interest rate increases. Furthermore, the Fed approved a plan to reduce the central bank’s $9 trillion beginning in June, mainly including Treasuries and mortgage-backed securities.
The Fed refuses to budge until inflation numbers enter normal ranges after cooking the economy during Covid lockdowns. The war in Ukraine and Covid lockdowns in China are significant issues keeping numbers high. Meanwhile, the markets are pricing a 2.5 – 2.7% policy rate by the end of the year.
Could inflation begin to improve later in the year? The Congressional Budget Office believes so in their latest report, according to CNBC’s Ylan Q. Mui.
Although things seldom go as planned, for now, markets will have to adjust to the no-BS tactics of the FED. Adam Cochran presents the perfect analogy of the situation:
Market update 🌍
As they say in Thailand, same same. The bitcoin (BTC) chart continues walking to a familiar beat. Monitor the downside support of 28.6k and a topside resistance of 30.8k. A breakout of one of the two spots is bound to happen soon. BTC completed the US session up 0.41% to US$29,673.
Source: Trading View
While price showcases its moonwalking skills, BTC option traders prepare for the monthly expirations today. The max pain, the price most bets are lost, currently resides at 34k. The max pain appears significantly far from current prices and an unlikely number for BTC to reach by tomorrow. Moreover, the 31k puts have the largest inflows of any strike in the past 24hr, signaling some last-minute portfolio balancing and bets. After the large expiration, traders will begin duking out for future expirations, which could help BTC break out of its “boredom range.”
Source: Coinoptionstrack.com
| US markets close | Gain |
| S&P 500 | +0.95% |
| Nasdaq | +0.59% |
| Dow | +0.34% |
| VIX | -3.60 |
| Protocol (Coin) | Price ($) | Gain (%) |
| The Sandbox (SAND) | 1.45 | +11 |
| Loopring (LRC) | 0.60 | +10 |
| Celo (CELO) | 1.42 | +6 |
| Safemoon (SFM) | 0.00089 | +26 |
| Songbird (SGB) | 0.03 | +14 |
| Synapse (SYN) | 1.34 | +10 |
| PlayDapp (PLA) | 0.58 | +8 |
| Olympus (OHM) | 21.24 | +8 |
| SKALE (SKL) | 0.09 | +8 |
| Radicle (RAD) | 3.20 | +55 |
| Monero (XMR) | 169.74 | +9 |
| Bitcoin Fear and Greed Index | 12 Extreme Fear |
| “Crypto” Google Trends 90d | 24 |
| “Bitcoin” Google Trends 90d | 38 |
Prepare for Terra 2.0 🌙
A new Terra Dawn: Terra 2.0. “The Terra ecosystem has voted to pass proposal 1623, calling the genesis of a new blockchain and preservation of the community.”
The initiation of Terra 2.0 will begin on May 27th without an algorithmic stablecoin. Instead, the old chain will be called Terra Classic (LUNC), and the former LUNA tokens will be converted into LUNC. The new LUNA token will be airdropped to LUNC stakers, holders, and UST holders. To look up token distribution details, please read the Terra Ecosystem Revival Plan 2.
The genesis of 2.0 will make Terra a community-owned blockchain.
Proposal 1747 remains open and, if passed, will burn the remaining community pool of UST.
Rundown of Token Distribution
- Community pool: 30%
- Pre-attack LUNA holders: 35%
- Pre-attack aUST holders: 10%
- Post-attack LUNA holders: 10%
- Post-attack UST holders: 15%
Newswatch 📰
Portugal’s Parliament rejects crypto tax. During the latest budget voting session, the Portuguese Parliament voted down proposals placed by minority parties to tax cryptocurrency. However, the country’s minister of finance, Fernando Medina, remains committed to creating a regulatory framework and taxing crypto gains above $5,000 in value.
a16z’s enormous investment into web3. Bear market? Not for Andreessen Horowitz. The investment firm behind Horowitz announced the a16z Fourth Fund valued at $4.5b, to invest into promising crypto, web3 and blockchain startups. In a letter released by a16z, the firm believes “we are entering the golden era of web3.”
Musk is determined to buy Twitter. Elon Musk increased his commitment bid to $33.3b, bringing the total to $44b towards acquiring Twitter. The stock jumped 5% on the news today.
News Tidbits:
- LayerZero labs, creator of Stargate (STG), raises $135m at a $1b valuation, with FTX leading the funding.
- Delphi Digital lacks strong convictions in Terra v2.
At the protocol level:
- Introducing Aura Finance centered around Balancer Labs veBAL.
- Deep Dive into Synapse.
- Introducing Risk DAO, a risk assessment framework, and associated audits to DeFi lending and borrowing protocols.
- StarkWare has raised $100M at a $8b valuation.
NFT & metaverse update 🐵
29 stolen Moonbirds. 29 Moonbirds worth $1.5m were stolen from an individual who clicked on a bad link during a phishing scam. On that note, here are some basic reminders of how to protect NFTs:
- Keep valuable NFTs in a separate cold storage wallet.
- Create a wallet solely for transactions.
- Never click any suspicious links and bookmark the websites you typically use.
- Use verified websites.
Banter’s take
Mixed feelings about Terra 2.0?
Understandable.
Speaking personally, Terra’s collapse hit my portfolio pretty hard. Mind you, I have nothing to lose with the new genesis. However, building trust MUST be a significant focus of the project. Unfortunately, by the looks of things, Do Kwon will be fighting to keep his name clean in the media and court.
But perhaps there’s some hope? The project’s early commitment to be 70% community-owned, for example. But how will that affect growth? Can the Terra team stay motivated without an influx of Venture Capital funds?
There are more questions than answers. So, enter the new era with few expectations. If the team surprises, that’s great; if it’s a big nothing burger, we’re back where we started. Only time will tell.
Stay zen, my frens.
Thanks for reading!
Gabri
