Dear Teroxx Community,
This week we saw a digital asset market which went through a consolidation and was able to temporarily establish and hold support levels in most assets.
Weekly overview
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
After a two-year break, the World Economic Forum (WEF) will be held in Switzerland again for the first time from today, May 22, to May 26, to discuss the current state of the global economy.
Actually, the annual event was already planned for January, but due to rising infection figures in the winter of 2021, the meeting was unceremoniously moved to the digital space.
Now, for the first time, the landmark event will be held under “normal” conditions, with nearly 300 members of government from around the world expected to gather to exchange ideas with hundreds of entrepreneurs and government representatives.
Blockchain and crypto also on the agenda
Among others, Female Quotient, a project working towards equality, will kick off its own presence in the Metaverse at the WEF. In addition to the so-called Equality Lounge, which will be held directly at the forum, the project will also hold a Twin Lounge in Decentraland (MANA) at the same time in order to be able to include virtual participants.
In addition, important industry heads such as FTX founder Sam Bankman-Fried will also be present, who will speak on the topic of sustainability in mining Bitcoin. The corresponding talk is scheduled for Tuesday, May 24, after which more guests from the crypto industry are expected to speak about the trade-off between mining cryptocurrencies and the resulting environmental impact.
The role of Decentralized Financial Services will also be touched upon.
Market-leading stablecoin issuer Tether (USDT) has submitted an attestation from an independent audit, which it claims shows that the circulating supply of its proprietary cryptocurrency is covered.
This is the crypto company’s response to recent prophecies of doom following the collapse of the algorithmic stablecoin TerraUSD (UST), as critical voices had now feared that Tether could also lose its peg to the US dollar.
According to Tether’s data, in Q1 2022 it invested more in U.S. government bonds – and in return withdrew money from short-term investments – which are considered particularly solid and liquid.
“Tether has repeatedly proven its own reliability, even in tough times for the crypto market. Not once has Tether been unable to fulfill a customer’s switching request,” as Tether CTO Paolo Ardoino comments.
So, with a current market capitalization of $74 billion, its stated reserves of $82 billion exceed the available supply by nearly $8 billion. Accordingly, the stablecoin would even have more than the required coverage in a ratio of 1:1.
Key people from G7 finance ministries have called on the Financial Stability Board to speed up regulation of crypto assets, Reuters reported Thursday, citing a communique. Canada, France, Germany, Italy, Japan, the United Kingdom and the United States met in the German city of Königswinter following a meeting of G7 foreign ministers earlier this week:
“Given the current turmoil in the crypto asset market, the G7 urges the FSB to ensure the rapid development and implementation of consistent and comprehensive regulation.”
The collapse of the algorithmic stablecoin Terra has impacted legislation around the world. U.S. Treasury Secretary Janet Yellen reiterated to the Senate Banking Committee on May 10 that a “uniform, federal framework” for stablecoins is needed.
Technical term of the week
Coverage of stable coins: Coverage and a 1:1 peg to the dollar can only take place if there is an equivalent amount of assets for each individual token. Stable Coin issuers must confirm this in independent audits so that there is no decoupling from value, as happened with UST.
Digital asset market
For almost two weeks now, Bitcoin has been hovering around the support region of $30,000 and Ethereum around $2,000. Based on the market capitalization and the fairly low trading volume, you can also see that the volatility is not particularly high at the moment and that the market is going through a stabilization phase. Thus, some altcoins saw smaller upswings, which, however, were not of long duration and thus did not represent a trend reversal. The start of the new trading week was slightly positive, which allowed the consolidation to continue, which could also lead to more volatile prices in the near future if the market sentiment is positive. Overall, it was a quiet trading week after the highly volatile weeks before.
Bullish outlook: Breakout from consolidation and break through resistance at ~$32,000 could see the market rise quickly towards $35,000 per bitcoin.
Bearish outlook: Loss of current support zones could result in retest of $25,000 region.
