Overview
- The Role of Retail Investors in VC games. Brought to you by Terra.
- Markets reverse yesterday’s gains
- Reaper is coming for Terra.
- The Ethereum merge inches closer to reality.
The role of retail investors in VC games, brought to you by Terra.
Pantera cashed out during the madness.
It’s come to light that Pantera Capital cashed out 80% of its LUNA positions the week before the Terra ecosystem collapse. The firm turned 1.7 million into a whopping $170 million in less than a year. Additionally, the firm sold the 2/3 remaining 20% in the beginning stages of UST’s de-peg.
The fun doesn’t end there. The Terra nodes run by Pantera Capital, Arrington Capital, and Binance produced zero blocks during the crash. During the most transactionally intensive moments of the chain, their nodes weren’t providing security. Why? No idea.
Is it suspicious and wrong? Likely.
One thing is clear; venture capital firms show little remorse to retail investors. The Terra collapse and all the events surrounding it paint a picture of self-preservation during times of panic. On the other hand, it’s about community building and hype when times are good. The latter provide liquidity and price pumps while the same firms take profits on the other end.
It’s thoughtful of them. Get investors emotionally attached to positions while remaining solvent when the shit hits the fan.
All and all, we must realize our role in this big game.
Market update 🌍
Zooming into the bitcoin (BTC) 4H charts, BTC price fell to the downside of a 2-week long wedge pattern opening the door to further pain. The volume from insanity week dried up late, but a 28-30k support zone still appears valid. The optimism from markets two days ago quickly dried up in the latest moves.
Source: Trading View
How much value has the entire crypto market lost during this drop? The total crypto market cap (TOTAL) has fallen from the peak of US$2.89 trillion in Nov 2021 to the current levels of US$1.22 trillion in a matter of 190 days, a loss of $US 1.67 trillion.- Putting it all into perspective, only 14 countries have a GDP (2022) larger than the amount of value crypto markets forfeited in six months.
Source: Trading View
| US markets close | Gain |
| S&P 500 | -4.04% |
| Nasdaq | -4.50% |
| Dow | -1.51% |
| VIX | +18.54% |
| Protocol (Coin) | Price ($) | Gain (%) |
| Chain (XCN) | 0.09 | +3 |
| Axie Infinity (AXS) | 21.97 | +2.6 |
| Testnet (10SET) | 2.87 | +11 |
| Injective (INJ) | 2.60 | +15 |
| Nest Protocol (NEST) | 0.03 | +8 |
| Biconomy (BICO) | 0.68 | +8 |
| Hxro (HXRO) | 0.25 | +6 |
| Veritaseum (VERI) | 34.46 | +12.5 |
| Bitcoin Fear and Greed Index | 13 Extreme Fear |
| “Crypto” Google Trends 90d | 29 |
| “Bitcoin” Google Trends 90d | 49 |
Newswatch 📰
Mike Novogratz’s letter to Galaxy Digital investors. Galaxy Digital CEO, Mike Novogratz, wrote a letter to its investors covering the Terra collapse where he encompasses the macro-backdrop that helped spur the UST depeg. Galaxy Digital initially backed Terra in 2020 before the project hit the limelight. On a side note, Novogratz recently tattooed a LUNA-related tattoo on his arm before the crash that he mentions in the letter.
“The flash-crash of LUNA/UST also reinforces a few core tenets of investing (especially crypto investing):
1. keep a diversified portfolio,
2. take profits along the way,
3. have a risk management framework, and
4. understand that all investments happen in a macro framework. “ – Mike Novogratz
Grim Reaper comes for Terra. The South Korean government has revived a program nicknamed the “Yeouido Grim Reaper,” after the Yeouido financial district of Seoul, to investigate the Terra incidents. Tax authorities in the country are also prepping a 100 billion won fine to the Luna Foundation Guard (LFG).
We are nearing the Ethereum Merge. Don’t hold your breath but the Ethereum merge approaches final preparations after reports of the chain’s developers advance to the following stages of testing. Anthony Sassano, a co-founder of EthHub, guesses the mainnet could go live as soon as August.
Tidbits:
- TRM labs release a community-led scam reporting platform. (add to your bookmarks!)
- Korean investors file both civil and criminal lawsuits against Do.
- Delphi Digital releases report on Terra (LUNA) incident.
- Terra 2.0 Tokenomics suck.
- State-backed hacking groups are turning their attention to crypto, and no one is ready for it yet.
- Coinbase launches Coinbase Institute, a think tank for cryptocurrencies.
On-chain ⛓
Tidbits:
- Balancer discloses vulnerability found by whitehat hackers.
- Lens Protocol goes live on Polygon (MATIC)
NFT & metaverse update 🐵
Notable Mints:
| Project | Type | Mint price | Date of mint | Time |
|---|---|---|---|---|
| Chimpers | pfp | 0.07 ETH | 20 May | 4:00 PM EST |
Banter’s take
The sky has blackened for Terra and all the parties involved. Next comes the not-so-fun stage of litigations, investigations, and hearings. Everyone from Do Kwon, venture capital firms, and the Luna Foundation guard will have questions to answer from authorities. With the Korean congress calling for a hearing, it’ll put crypto center stage in the middle of a market downcycle.
Terra was a decentralized stablecoin project until it collapsed, and its new label is “Ponzi scheme.” Some people will have to take the fall, and once crypto heroes like Do will turn into villainous characters under media scrutiny. It was a long climb for Terra and an even longer fall ahead.
Gabri
