- Amidst the market turmoil, market analysts are advising investors on how to ensure they are not completely wrecked.
- Key developments are a sign that market fundamentals are still strong and a recovery is imminent.
As you may have noticed, the cryptocurrency market has been showing negative dynamics lately. Today we are not going to look at the reasons for the fall, but we will touch on the topic of what to do for HODLers.
For the first time in a long period, the Crypto Fear & Greed Index dropped to the Extreme Fear indicator. What does this mean, and how can we use this as cryptocurrency investors?
Buy low, sell high
The cryptocurrency market is very emotional, investors, especially beginners start buying assets when the market is rising and sell them when the market is red. In fact, it is worth buying assets when the market is falling and most holders are trying to get out of their positions. As Warren Buffett said, be greedy when others are fearful.
So a big drop provides an opportunity to buy your favorite assets at a big discount, which in itself is a great opportunity.
Also, it is worth understanding that a strong fall in the crypto market can be the best event of your life. (Unless, of course, you are a 70+ y.o. boomer). Assets like Ethereum and Bitcoin aren’t going anywhere, and their price will rise over time, as will the price of some decent altcoins.
Bitcoin is stronger than ever
Despite the ongoing bear market, Bitcoin HODLers and investors appeared to have a bullish attitude on the price trend. Crypto expert Lark Davis issued a series of tweets indicating that he remains optimistic about the token.
Furthermore, Willy Woo, another analyst, came to Twitter to defend BTC, claiming that it has always outperformed all other tokens. Looking at the bitcoin chart Willy Woo Said:
I call this chart “we are still early”.
Hodling for 4 years, BTC has always outperformed every other asset class. ALWAYS. Zooming out, things become clear.
— Willy Woo (@woonomic) May 5, 2022
Micheal Saylor, a Microstrategy executive, remained enthusiastic about BTC as well.
Luna Foundation Guard loans $1.5B in Bitcoin
Drastic times call for drastic measures. The Luna Foundation Guard (LFG) has voted to lend $1.5 billion in crypto to protect its native. The organization’s council voted to lend out $750 million in from its reserves and $750 million in TerraUSD (UST) to keep the latter asset pegged to $1.
1/ The LFG Council just voted to deploy 1.5B in capital (0.75B in BTC, 0.75B in UST) to allay market concerns around UST. Some more context on why and how: https://t.co/TfaAPkzgUJ
— Do Kwon 🌕 (@stablekwon) May 9, 2022
2/ First, *LFG is not trying to exit its bitcoin position*.
The goal is to have this capital in the hands of a professional market maker such that:
1) Buy UST if price < peg
2) Buy BTC if price >= peg
thus significantly strengthening the liquidity around UST peg
— Do Kwon 🌕 (@stablekwon) May 9, 2022
Japanese e-commerce site adopts BTC and XRP payments for used cars
The development marks the first use of XRP digital currency on a cross-border Japanese e-commerce site. SBI Motor Japan, a subsidiary of SBI Africa Co. Ltd. announced that its customers can now pay for used cars with Bitcoin ( BTC ) and Ripple ( XRP ).
Japan’s first #XRP payment support on the e-commerce site by SBI Motor Japan. They export about 5,000 used cars annually, mostly to Africa. #BTC will be the other crytpo-asset accepted. @yoshitaka_kitao keeps putting XRP utility in play.https://t.co/MYfcofN3XE
— ☀🌸CryptoEri 196k+ Followers (beware of imposters) (@sentosumosaba) May 9, 2022
The move is seen as a positive step forward for Ripple, which is fighting a lawsuit filed in 2020 for selling unregistered securities in the form of XRP. The lawsuit has dealt a crushing blow to XRP and its holders, who have seen some platforms stop supporting the digital currency. Ripple CEO Brad Garlinghouse recently expressed optimism that the long-running lawsuit with the SEC will lead to a favorable outcome for the global blockchain-based payment company.
Compound’s Enterprise Arm Receives S&P Credit Rating in DeFi First
Decentralized finance platform (DeFi) Compound’s institutional offering has received mixed ratings from S&P Global Ratings. The creditworthiness arbiter gave Compound Treasury (a Compound Prime LLC product) a grade of B, which means the USDC-based yield platform is considered “speculative” but “currently capable of meeting financial obligations.”
“The outlook is stable,” S&P said in a statement about Compound Prime.
Despite the poor scores, Compound took the top spot in DeFi’s ranking. This appears to be the first time a “DeFi institutional product” has been rated by a major rating agency.
Major rating weaknesses include, in our view, the company’s very low capital base, regulatory risk associated with cryptocurrencies, considerable operational risk and complexity, convertibility risk between private stable coins and fiat currency, and the potential hurdles to generate a 4% return.