Sun, 22 Dec 2024 03:37:38 -0800WeeblyMon, 16 May 2022 18:13:13 GMThttp://plim2.org/ffp_death-of-cryptos_5-15-22/death-of-cryptocurrencies_5-15-22PLIM Financial Preparedness Notes Sunday, 05-15-2022 
Dr. Lee Warren, BA, PLIM Inc. Founder & CEO 
Scripture Lesson: Gen. 47:15


Topic: The Death of Cryptocurrencies 
Or Is This a Repeat of the Tech Stocks in 2000?
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Genesis 47:15
King James Version
“15 And when money failed in the land of Egypt, and in the land of Canaan, all the Egyptians came unto Joseph, and said, Give us bread: for why should we die in thy presence? for the money faileth”.
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Video of the Day


Video: How Crypto Is Facing It’s First Lehman Brothers Collapse scenario
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Topics and Headline News


Depression/Recession Will Be Manifested 3-6 Months 2022 by 2023
There are multiple reasons for the recession or collapse of USA and world economies. Worldwide Debt in every major countries that can’t be paid.


Events that cause the collapse. 


Inflation CPI at 40 years High 8.5%; Prices of everything increasing; Food , Gasoline, Diesel, Rent, consumers under extreme stress Etc.


The big news this month in the US is the FEDS raising the interest rate 50 basis point or 0.50%.This cause havoc in the markets that took big hit. see below


In June interest rate will be raised 0.50% first half of the year interest rate will 1.5% IR


Rising real estate interest rate is crashing the housing market with rates in this market approaching 6.0% and may go to 7.0%.


Broken Supply Chain and Shortage across the board


Sanctions of Russia and their Impact on the World


Russian Ruble tied to Gold for buying Russian OIL


Stock markets , Bitcoin, West Texas Oil, Gold and Silver Continues To be very volatile (Monthly since the Fin Prep)
DOW -2.37% vs -0.65%, -780.55 vs -227, 32,196.66 vs 32,977.21 points
$NDX -3.64% vs -6.11%, -467.41 vs -869, 12,387 vs 12,854.80 points
S&P500  -2.61% vs -3.04%, -108.04 vs -138, 4023.89 vs 4131.93 points
Bitcoin -19.81% vs -11.72%, -7457.23 vs 5337; 30,192.90 vs $37,650 points
Oil West Texas $WTIC  +5.54% vs +6.65%, +5.80 vs +6.7, 110.49 vs 104.69 points


Gold  -5.41% vs +1.07%, -103.50 vs +21; 1808.20 vs 1911.70 points
Silver -9.03% vs +2.26%,  -2.08 vs +.057; 21.00 vs 23.09 points


All Commodities have exploded, but are very volatile - SuperCycle
Real Time Commodity Futures Prices


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PLIM Blog_Crumbling Babylon_5-14-22


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Introduction
This past week a blood bath occurred with the decline of the Crypto markets. The major stock markets also took a significant decline as well, including gold and silver. What the markets are facing is a major liquidity crisis.


These declines created fear and panic in the markets which signaled more to come with further decreases in these markets. By Friday of last week, the markets rallied along with Bitcoin.


Quoting an article on crypto from The Speculator, an English Magazine. 


“Many thought that Bitcoin and other cryptocurrencies could turn out to be a hedge against inflation. Those hopes have been dashed. While most currencies have been devaluing against real-world assets, cryptocurrencies have been falling in value faster. As for the other long-term incentive to hold Bitcoin – that it might provide a stable wealth store from the prying eyes of government – that started to decay a while ago as governments got better at tracking down cryptocurrencies.” 


“So cryptocurrencies are no longer making anyone rapid fortunes, are no longer protecting against inflation, and governments are working out how to find them. What exactly is the attraction? They are clearly little more than a pyramid scheme: machines for redistributing wealth from players who are late into the gold rush to those who were early. And like all other pyramid schemes, they have a brief and finite life. Many of these new get-rich-quick schemes – like NFTs – have already come and gone.“
Crypto is dead




Do Kwon is a Korean cryptocurrency developer who co-founded and is CEO of Singapore-based Terraform Labs. He is the founder and inventor of these coins. “…Terra, both imploded in spectacular fashion. Terra is supposed to be trade reliable at the value of exactly one U.S. dollar, but it plummeted to 29 cents on Wednesday morning. Luna was down 99 percent since its highs last month. More than $40 billion in wealth — no small part of it from retail investors — was gone in a matter of hours. The shock of the sudden collapse sent the price of bitcoin falling to its lowest point since July, exposing how a coin labeled a Ponzi scheme by its critics had impacted the larger market in digital assets. Meanwhile, shares in leading U.S.-based crypto exchange Coinbase were off by 25 percent, and the trillion-dollar-plus crypto industry is teeming with rumors about large funds or companies that may be on the brink of failure.”


“…. The idea is this: The two tokens are supposed to act as a balancing mechanism for each other, by which one is automatically created or destroyed based on the supply and demand of the other. While Terra should always be at $1, Luna could rise and fall with the markets — and the coins could freely be exchanged for each other for small profits. …Get $10 billion and instead of putting it away for safekeeping, like a central bank, pay people to use the coins. …It grew so fast that by last weekend it had $18 billion in assets, much of it in bitcoin. The company that oversaw all this, Terraform Labs, had backing from major investors like Coinbase Ventures, Pantera Capital, and Novogratz’s own Galaxy Digital, according to Bloomberg.


“… By early spring, the Federal Reserve started sucking money out of the system, the price of a monthly mortgage payment was a few hundred dollars more, and all of a sudden crypto stopped being so hot. Crackdowns in China and a wobbly bitcoin adoption experiment in El Salvador seemed to stop the currencies’ utopian ambitions. ..As 2022 wore on, it all started to feel more and more like the domain of weirdo-rap alleged money launderer Razzlekhan.”
The Crash of Crypto’s Perpetual Wealth Machine
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Quoting from THE MONEY GAME MAY 11, 2022
The Crash of Crypto’s Perpetual Wealth Machine by Kevin T. Dugan


Here few quotes


“What made Terra so popular was a lending program called Anchor that gave users 18 to 20 percent interest a year, bleeding its coffers of millions of dollars a day. Matt Lorion, a TikTok star with a talent for gravitating toward crypto scams, claimed to be buying a house via this play. At a moment when savings accounts yield approximately zero percent, the program was so lucrative for users that the substantial majority of Terra coins in circulation were locked up to harvest this yield (and therefore not in use for trading).” 


“Kwon even had a plan to defend Luna and Terra: There was a whole other pot of money, funded by $1 billion from large investment firms like Jump Crypto and Three Arrows Capital, that would buy up Terra in case of a bank run. (The terms of the deal were not announced).” 


Now Bloomberg Columnist Matt Levine said this scheme is “insane”


Here is what others others crypto experts had to said about it as a straight-up Ponzi scheme.


Cory Klippsten, CEO of the exchange Swan Bitcoin, said the following about Do Kwon inventor of Terra-Lucid and these Stablecoins. “This is purely a Ponzi.” 


Klippsten goes on to say it “… appears to have been keeping the price as high as possible for as long as possible so investors could make a profit after a lock-up period ended and then bounce. “This is purely a Ponzi.“There’s no reason for this thing to exist,”


He also said “It’s such a window in time where you’re just outside the reach of regulation you have absolutely no restrictions. You can create a token out of thin air, market it however the heck you want. Insider info, insider trading — everything that would be illegal in traditional markets, they can do it all day long with no repercussions.”
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“The collapse of Terraform Labs triggered a major meltdown in the crypto market this week, sparking scrutiny and criticism towards CEO Do Kwon, the mastermind behind failing cryptocurrencies TerraUSD and Luna.”


“Issuer stablecoin Luna plunged more than 99 per cent in value on Thursday, May 12, and was trading at below one cent, down from a high of $120 last month. Kwon, who was deemed responsible for the crash, has now been called "the Elizabeth Holmes of crypto" by a Coindesk columnist, referring to the convicted Theranos founder who defrauded investors for billions. Kwon's reputation was further damaged by his controversial habit of branding his critics as "poor" and claiming in a recent interview that he found "entertainment in watching companies die."
Who is Do Kwon? TerraUSD founder alleged to be behind crypto bloodbath


“SILVER SPRING, Md. (AP) — Cryptocurrency trading platform Coinbase has lost half its value in the past week, including its biggest one-day drop 50 date on Wednesday as the famously volatile crypto market weathers yet another slump.”


“Coinbase reported a $430 million net loss in the first quarter, or $1.98 per share, on declining sales and active users. Analysts were expecting profit of 8 cents per share. Revenue was down as trading volumes fell, and active monthly users declined 19% from the fourth quarter.”


“It’s unlikely those results surprised investors — shares Coinbase Global Inc. declined 43% in the four days leading up to their earnings release Tuesday. On Wednesday, shares fell 26%, to $53.72 per share. On the day of its initial public offering just 13 months ago, prices hit $429 per share.”
Coinbase loses half its value in a week as crypto slumps




Video Gareth Soloway’s $20k Bitcoin target is finally within reach; Is this the end for cryptos?


Stablecoins Are Unstable!




“Digital currencies are plunging in value today in a so-called 'crypto winter' that has lost investors billions and is fuelling fears that it is the harbinger of a wider stock market crash.”


“The world's second largest cryptocurrency Ethereum has joined the crash - plummeting in value by 20 per cent over the last 24 hours - in the digital downturn that is hammering investors who bought during the Covid years.”


“Cryptocurrencies are a form of digital money that use mathematics to create a unique piece of code that customers invest in.

• “Ethereum has plunged 20 per cent in 24 hours as part of the latest crypto crash
• Bitcoin has also plunged 11.24 per cent as investors suffer heavy losses
• Luna, another large cryptocurrency, lost almost all of its value overnight
• Despite the downturn, traditional tech stocks are faring even worse
• Amazon has lost 30 per cent of its value in just one month of trading
• The crash caused transactions on exchange Binance to slow down after traders bemoaned ill-timed 'scheduled maintenance' earlier stopping trades earlier” 

The cryptocurrency bubble bursts… but is it a sign of a stock market crash to come? Digital investors lose fortunes as Ethereum sheds 20% of its value in 24 hours, Luna drops NINETY-EIGHT per cent and Coinbase warns customers may lose ALL their money




“It has been a bloodbath week, as some called it, for the crypto market.”


“Stablecoin USDTerra, or UST USTUSD, -1.22%, once among the top 10 largest cryptocurrency by market cap, lost its 1 to 1 peg against the U.S. dollar, falling to as low as 6 cents on Friday, according to CoinDesk data. LUNA LUNAUSD, 4.55%, another cryptocurrency backing UST, fell nearly to zero from over $80 in early May, with its market capitalization shrinking by more than $40 billion from early April.”


“It marks “the largest wealth destruction event in the short history of the crypto markets,” since bitcoin was created in 2009, crypto trading firm QCP Capital wrote in a Friday note.”  
Explained: Why is UST, LUNA crashing? Collapse of a once $40 billion cryptocurrency, explained


“Meanwhile, bitcoin BTCUSD, 0.85% on Thursday fell to $25,402, the lowest level since December 2020, before it rebounded to about $30,000 on Friday, according to CoinDesk data. The bitcoin fear and greed index currently stands at one of its lowest points, indicating extreme fear." 
How a bitcoin market ‘in extreme fear’ compares with the past, and what to expect next


“It's MicroStrategy, which is based in Virginia and provides business intelligence, mobile software, and cloud computing. It owns about 2 1/2 times as much bitcoin as the next closet company, which would be Tesla.”
 
“The reason MicroStrategy is so long on bitcoin is because its 57-year-old billionaire CEO, Michael Saylor, had an epiphany in 2020, when COVID-19 had shut down most of the country. Bitcoin, he tells me, "is an approximation of a perfect monetary system because it is correct. It has no inflation in it. It's not corruptible because it's decentralized." He believes bitcoin is the last, best hope of creating an economy that is independent of the machinations of politics, central banks, and connected investors who rig the system to benefit themselves at the expense of regular people.”
Will Bitcoin Billionaire Investor Michael Saylor End up at McDonald's?


"Tether, the world’s largest stablecoin, broke below its $1 peg Thursday amid panic in the crypto market.”


“The token sank to as low as 95 cents on some exchanges at around 3:15 a.m. ET. It’s meant to be pegged 1-to-1 to the U.S. dollar. In the afternoon it traded at $0.998, according to Coin Metrics.”


“Tether’s initial decline came after terraUSD, another stablecoin, plummeted below 30 cents Wednesday, which led to fears of a possible market contagion. TerraUSD, or USD is different to tether in that it relies on code rather than funds held in a reserve to support its supposed peg to the greenback.”


Vijay Ayyar, head of international at crypto exchange Luno, said the move by tether was likely “speculation-driven fear” resulting from the fallout of UST’s plunge.”
The world’s biggest stablecoin has dropped below its $1 peg


CRYPTO WORLD


“Bitcoin dropped below the $27,000 level as a recent sell-off in the cryptocurrency space continues.”


“The price of bitcoin was last down 8.76% to $26,848.20 as of 1:47 a.m. ET Thursday, according to data from Coin Metrics. Ether fell more than 13% to $1,832.33.”


“Cryptocurrencies fell with stocks after the Bureau of Labor Statistics reported consumer prices for the month of April jumped 8.3%, which was slightly higher than expected by economists polled by Dow Jones.”


“That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&P 500 and, more recently, the Nasdaq Composite.”
Bitcoin drops below $27,000 level as crypto sell-off continues    
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