Buterin is one of the creators of ethereum, the second most important cryptocurrency in the world after bitcoin. Photo: AFP
Vitalik Buterinco-founder of the blockchain platform ethereum, is not going through his best moments as an investor. The dramatic collapse of cryptocurrencies after the crash of assets Terra USD (UST) and Terra (LUNA) caused huge economic losses. So he even recognized that there was stop being a billionaire.
Although the market has slowly begun to recover, many of the investments have fallen sharply in recent weeks. Thus, the Bitcoin, Ether, Cardano, XRP, Polkadot, Avalanche and other cryptos have fallen between 25 and 50% and reached their lowest price since the end of 2020.
In this framework, he provided details about the current situation of his crypto asset portfolio after the global crash: “I’m no longer a billionaire”Buterin, 28, wrote this Friday in a post on the social network Twitter.
However, at another point on Friday, Buterin – who visited Argentina in December and met with various Argentine political leaders – reiterated his support for blockchain assets that he helped create and showed confidence in his evolution: “Note to trolls: no, Ethereum was not a mistake.”
Buterin, along with Macri, on his visit to Argentina last December: he met with several politicians from the ruling party and the opposition.
Buterin created Ethereum in 2014 and owns a digital wallet that, in November, contained assets approximately $ 1.5 billion. Since then, according to data compiled by Bloomberg, the price of the blockchain-associated token has fallen 55 percent.
However, the onset of the bearish trend given the major cryptocurrencies since the beginning of the year is not classified as a negative symptom of Buterin. He added that “people who are extremely interested in cryptocurrencies, and especially in their construction, welcome a bear market.”
Cryptocrash: The founder of Binance also lost a fortune
Photo: REUTERS
The combination of rising interest rates in the United States and the collapse of Terra, one of the ten cryptocurrencies with the largest capitalization, triggered the perfect storm for the digital market. Like Buterin, he also wore Changpeng Zhaofounder of cryptocurrency exchange Binance, saw more than $ 80 billion, or 84% of its wealth, evaporate.
Crypto passed last week your worst period in 12 monthswith a fall in the price of Bitcoin and other cryptoactives that led to over US $ 500,000 lost in the market and reaching its lowest price since 2020.
No one has survived the dynamics of other variable income assets, such as company shares, which have been suffering for months — and in particular this past week — the change in the Federal Reserve’s (FED) monetary policy, which removed 0% interest rates and announced increases of up to 1%, with the aim of raising them in the coming months to curb inflation levels, the highest in 40 years.
In this sense, major indices of companies such as the S&P 500, Nasdaq and the Dow Jones have fallen between 12 and 30% so far this year, due to capital inflows in search of less risky properties.
This is in response to end of “cheap money” in the world and an impressive increase in the shares of the world’s leading companies — more than 100% between 2020 and 2021—, driven by record issuance of money due to the pandemic and which led to rising inflation.
However, with the headwind brought on by the financial market, he added the horror of the virtual disintegration of Terraone of the most important ecosystems in the crypto market, which includes a native token (Month) and a stable coin or stablecoin (UST) which, together, have a value of US $ 50,000 million just a few days ago.
The fall of Terra follows, fundamentally, in a massive cash flow placed on USTthat dollar equality is supported by the Luna value and an algorithmic arbitrage mechanism between one and the other.
The mechanism allowed that, prior to the UST sale, Moons were sold on the market to pay for that “dollar” with the new Moons, and vice versa if not.
However, the loss of equity in the dollar for several hours alerted its holders, who had approximately 80% of the existing UST deposited with Anchor Protocol, a type of bank that offers an annual return of 19.6% in exchange for these deposits.
That’s where the call began “spiral of death”: a massive sale of UST paid for by Moons ’release not being absorbed by the market, which fell in its price and forced larger issuance to maintain dollar equity.
As a result, Luna became less than 1 cent from being $ 64 per unit on Sunday, May 8 and UST became less than 20 cents a week later.
The question of whether a phenomenon like the one that happened at UST could happen to other stablecoins —USDT, USDC or DAI being the best known, with a capitalization of more than US $ 132,000 million – was what greatly shaken the scheme.
Although they have mechanisms another backup -some have audited bank deposits that allegedly secure each unit in circulation using a fiduciary dollar, and others have a basket of cryptocurrencies that greatly exceed their value in circulation – The fear that they will fall also fills the market with fear.
According to market analysts, the scenario that is currently happening is what many taught a few months ago.: the end of the bull market began in mid -2020 and entering the era of lower prices, which will leave room for the safety of projects that really adds value and availability.
SL
Source: Clarin
