Month: May 2022

Brent hits $124/b after EU bans seaborne Russian oil exports

Posted on by Vrasidas Neofytou

Oil prices were also supported by China’s easing of COVID-19 lockdown measures, and the expectation for more fuel demand following the reopening of the economic and shipping hub of Shanghai with a 25 million population.

EU decision:

Crude oil prices jumped to levels that haven’t been seen since late March after the European leaders agreed in principle to cut 90% of oil imports from Russia to the European Union by the end of 2022 on Monday night.

To maximize the pressure on Russia to end the war against Ukraine and cut a significant amount of financing for its war machine, the EU sanctioned the seaborne deliveries of its crude within six months and oil products within eight months.

The EU ban covers immediately the 2/3 of the seaborne Russian oil exports to the continent (1.6 million barrels per day), and with Germany and Poland saying they will cut the Druzhba pipeline supply by the year end; the impacted oil would exceed 90% by the year end.

Yet, the imports of Russian oil through the Druzhba pipeline (0,7 million barrels per day) are not concerned by this embargo (exception) after the pressure from the landlock countries of Hungary, Slovakia, and Czech Republic whose their refineries are technically reliant on Russian crude.

Romania also received guarantees from EU leaders that it would be able to receive replacement supplies if the pipelines were disrupted.

Brent crude, Daily chart

Oil prices were also supported by China’s easing of COVID-19 lockdown measures, and the expectation for more fuel demand following the reopening of the economic and shipping hub of Shanghai with a 25 million population.

EU decision:

Crude oil prices jumped to levels that haven’t been seen since late March after the European leaders agreed in principle to cut 90% of oil imports from Russia to the European Union by the end of 2022 on Monday night.

To maximize the pressure on Russia to end the war against Ukraine and cut a significant amount of financing for its war machine, the EU sanctioned the seaborne deliveries of its crude within six months and oil products within eight months.

The EU ban covers immediately the 2/3 of the seaborne Russian oil exports to the continent (1.6 million barrels per day), and with Germany and Poland saying they will cut the Druzhba pipeline supply by the year end; the impacted oil would exceed 90% by the year end.

Yet, the imports of Russian oil through the Druzhba pipeline (0,7 million barrels per day) are not concerned by this embargo (exception) after the pressure from the landlock countries of Hungary, Slovakia, and Czech Republic whose their refineries are technically reliant on Russian crude.

Romania also received guarantees from EU leaders that it would be able to receive replacement supplies if the pipelines were disrupted.

Brent crude, Daily chart

Oil prices were also supported by China’s easing of COVID-19 lockdown measures, and the expectation for more fuel demand following the reopening of the economic and shipping hub of Shanghai with a 25 million population.

EU decision:

Crude oil prices jumped to levels that haven’t been seen since late March after the European leaders agreed in principle to cut 90% of oil imports from Russia to the European Union by the end of 2022 on Monday night.

To maximize the pressure on Russia to end the war against Ukraine and cut a significant amount of financing for its war machine, the EU sanctioned the seaborne deliveries of its crude within six months and oil products within eight months.

The EU ban covers immediately the 2/3 of the seaborne Russian oil exports to the continent (1.6 million barrels per day), and with Germany and Poland saying they will cut the Druzhba pipeline supply by the year end; the impacted oil would exceed 90% by the year end.

Yet, the imports of Russian oil through the Druzhba pipeline (0,7 million barrels per day) are not concerned by this embargo (exception) after the pressure from the landlock countries of Hungary, Slovakia, and Czech Republic whose their refineries are technically reliant on Russian crude.

Romania also received guarantees from EU leaders that it would be able to receive replacement supplies if the pipelines were disrupted.

Brent crude oil prices briefly jumped above the $124/b level and WTI to $119/b earlier Tuesday after European Union reached a compromised agreement to ban 90% of Russia’s crude imports by the end of 2022 (excluding deliveries via pipeline to get to landlocked countries onboard) coupled with the reopening of China, and the start of the U.S. summer driving season.

Brent crude, Daily chart

Oil prices were also supported by China’s easing of COVID-19 lockdown measures, and the expectation for more fuel demand following the reopening of the economic and shipping hub of Shanghai with a 25 million population.

EU decision:

Crude oil prices jumped to levels that haven’t been seen since late March after the European leaders agreed in principle to cut 90% of oil imports from Russia to the European Union by the end of 2022 on Monday night.

To maximize the pressure on Russia to end the war against Ukraine and cut a significant amount of financing for its war machine, the EU sanctioned the seaborne deliveries of its crude within six months and oil products within eight months.

The EU ban covers immediately the 2/3 of the seaborne Russian oil exports to the continent (1.6 million barrels per day), and with Germany and Poland saying they will cut the Druzhba pipeline supply by the year end; the impacted oil would exceed 90% by the year end.

Yet, the imports of Russian oil through the Druzhba pipeline (0,7 million barrels per day) are not concerned by this embargo (exception) after the pressure from the landlock countries of Hungary, Slovakia, and Czech Republic whose their refineries are technically reliant on Russian crude.

Romania also received guarantees from EU leaders that it would be able to receive replacement supplies if the pipelines were disrupted.

Brent climbs to $118/b on supply concerns ahead of the summer driving season

Posted on by Vrasidas Neofytou

The crude oil prices trade near a two-month high and are on track for a gain of about 4% this week so far as investors are concerned about the shortage of global supplies at a time demand for fuels is expected to pick up in the following weeks ahead of the start of the summer driving season in the world’s biggest oil-consuming nations such as the U.S. Europe, and some parts of Asia.

Energy investors have turned bullish on crude oil prices recently on expectations that the European Commission will eventually obtain the unanimous support of all 27 bloc member states for its proposed new sanctions against Russia in retaliation for Moscow’s invasion of Ukraine before the body’s next meeting at the end of May 30, despite Hungary’s opposition.

Hungary has been opposing an embargo on Russian oil sales based on its energy security, while is also demanding about 750 million euros ($800 million) from EU to upgrade its refineries and expand a crude oil pipeline from Croatia.

Crude oil prices get also support from the covid-led developments in China, as the largest economic hub Shanghai is preparing to reopen after a two-month lockdown, increasing the demand for petroleum products.

Brent oil price climbed to as high as $139 in early March, the highest since 2008, after Russia’s invasion of Ukraine exacerbated supply concerns, before retreating to near $110/b following China’s Covid-led curbs, and concerns over a possible global economic recession.

Tight fuel market:

On top of the expected summer driving fuel demand, the U.S. product market has tightened significantly after the U.S. Energy Information Administration showed on Wednesday a (larger than expected) decline of 1.02MMbbls in the commercial crude oil inventories for the week to May 20, while if you consider the releases from the strategic petroleum reserve, then the total U.S. crude oil inventories declined by almost 7MMbbls.

Hence, investors are also concerned about the tight gasoline supplies as the U.S. gasoline stockpiles have dropped at the lowest seasonal level since 2014, and this comes ahead of the annual driving season that starts this weekend.

Brent crude price, Daily chart

The crude oil prices trade near a two-month high and are on track for a gain of about 4% this week so far as investors are concerned about the shortage of global supplies at a time demand for fuels is expected to pick up in the following weeks ahead of the start of the summer driving season in the world’s biggest oil-consuming nations such as the U.S. Europe, and some parts of Asia.

Energy investors have turned bullish on crude oil prices recently on expectations that the European Commission will eventually obtain the unanimous support of all 27 bloc member states for its proposed new sanctions against Russia in retaliation for Moscow’s invasion of Ukraine before the body’s next meeting at the end of May 30, despite Hungary’s opposition.

Hungary has been opposing an embargo on Russian oil sales based on its energy security, while is also demanding about 750 million euros ($800 million) from EU to upgrade its refineries and expand a crude oil pipeline from Croatia.

Crude oil prices get also support from the covid-led developments in China, as the largest economic hub Shanghai is preparing to reopen after a two-month lockdown, increasing the demand for petroleum products.

Brent oil price climbed to as high as $139 in early March, the highest since 2008, after Russia’s invasion of Ukraine exacerbated supply concerns, before retreating to near $110/b following China’s Covid-led curbs, and concerns over a possible global economic recession.

Tight fuel market:

On top of the expected summer driving fuel demand, the U.S. product market has tightened significantly after the U.S. Energy Information Administration showed on Wednesday a (larger than expected) decline of 1.02MMbbls in the commercial crude oil inventories for the week to May 20, while if you consider the releases from the strategic petroleum reserve, then the total U.S. crude oil inventories declined by almost 7MMbbls.

Hence, investors are also concerned about the tight gasoline supplies as the U.S. gasoline stockpiles have dropped at the lowest seasonal level since 2014, and this comes ahead of the annual driving season that starts this weekend.

Brent crude price, Daily chart

The crude oil prices trade near a two-month high and are on track for a gain of about 4% this week so far as investors are concerned about the shortage of global supplies at a time demand for fuels is expected to pick up in the following weeks ahead of the start of the summer driving season in the world’s biggest oil-consuming nations such as the U.S. Europe, and some parts of Asia.

Energy investors have turned bullish on crude oil prices recently on expectations that the European Commission will eventually obtain the unanimous support of all 27 bloc member states for its proposed new sanctions against Russia in retaliation for Moscow’s invasion of Ukraine before the body’s next meeting at the end of May 30, despite Hungary’s opposition.

Hungary has been opposing an embargo on Russian oil sales based on its energy security, while is also demanding about 750 million euros ($800 million) from EU to upgrade its refineries and expand a crude oil pipeline from Croatia.

Crude oil prices get also support from the covid-led developments in China, as the largest economic hub Shanghai is preparing to reopen after a two-month lockdown, increasing the demand for petroleum products.

Brent oil price climbed to as high as $139 in early March, the highest since 2008, after Russia’s invasion of Ukraine exacerbated supply concerns, before retreating to near $110/b following China’s Covid-led curbs, and concerns over a possible global economic recession.

Tight fuel market:

On top of the expected summer driving fuel demand, the U.S. product market has tightened significantly after the U.S. Energy Information Administration showed on Wednesday a (larger than expected) decline of 1.02MMbbls in the commercial crude oil inventories for the week to May 20, while if you consider the releases from the strategic petroleum reserve, then the total U.S. crude oil inventories declined by almost 7MMbbls.

Hence, investors are also concerned about the tight gasoline supplies as the U.S. gasoline stockpiles have dropped at the lowest seasonal level since 2014, and this comes ahead of the annual driving season that starts this weekend.

Brent crude prices gained 3% climbing to near $118/b and WTI to $114/b on Friday morning, their highest since the end of March, supported by the expectation of an EU ban on Russian oil sales, the falling oil inventories, and the lack of spare capacity ahead of the start of the summer driving season in the North Hemisphere which will increase the demand for fuels.

Brent crude price, Daily chart

The crude oil prices trade near a two-month high and are on track for a gain of about 4% this week so far as investors are concerned about the shortage of global supplies at a time demand for fuels is expected to pick up in the following weeks ahead of the start of the summer driving season in the world’s biggest oil-consuming nations such as the U.S. Europe, and some parts of Asia.

Energy investors have turned bullish on crude oil prices recently on expectations that the European Commission will eventually obtain the unanimous support of all 27 bloc member states for its proposed new sanctions against Russia in retaliation for Moscow’s invasion of Ukraine before the body’s next meeting at the end of May 30, despite Hungary’s opposition.

Hungary has been opposing an embargo on Russian oil sales based on its energy security, while is also demanding about 750 million euros ($800 million) from EU to upgrade its refineries and expand a crude oil pipeline from Croatia.

Crude oil prices get also support from the covid-led developments in China, as the largest economic hub Shanghai is preparing to reopen after a two-month lockdown, increasing the demand for petroleum products.

Brent oil price climbed to as high as $139 in early March, the highest since 2008, after Russia’s invasion of Ukraine exacerbated supply concerns, before retreating to near $110/b following China’s Covid-led curbs, and concerns over a possible global economic recession.

Tight fuel market:

On top of the expected summer driving fuel demand, the U.S. product market has tightened significantly after the U.S. Energy Information Administration showed on Wednesday a (larger than expected) decline of 1.02MMbbls in the commercial crude oil inventories for the week to May 20, while if you consider the releases from the strategic petroleum reserve, then the total U.S. crude oil inventories declined by almost 7MMbbls.

Hence, investors are also concerned about the tight gasoline supplies as the U.S. gasoline stockpiles have dropped at the lowest seasonal level since 2014, and this comes ahead of the annual driving season that starts this weekend.

Concentration risk in markets

Posted on by George Kessarios

This was fine when markets were rising and no one questioned the valuation of the top components, but now after 7 weeks of lower lows, investors are asking themselves if Apple and many other stocks were worth what they paid for them.

But whether valuations were warranted or not, the risk of concentration remains. And this in turn might mean that, unless Apple and several other top constituents stop falling, it might be very difficult for the S&P Index to rally.

The bottom line is that there is much turbulence in markets today. In additional to supply shock issues, high energy, war, Central Bank tightening, we also have concentration risk. Obviously the more diversified investors are, the better, but when the top S&P 500 components are in most institutional portfolios (directly or indirectly), it’s difficult to avoid concertation risk at the current time. As Apple and other top brass components go, so will markets, for the time being.

At the same time, the 10 biggest companies by market cap in the S&P 500 Index comprise about 30% of the total market cap. This means there is the risk of high concentration in indexed products, and the market as a whole.

This was fine when markets were rising and no one questioned the valuation of the top components, but now after 7 weeks of lower lows, investors are asking themselves if Apple and many other stocks were worth what they paid for them.

But whether valuations were warranted or not, the risk of concentration remains. And this in turn might mean that, unless Apple and several other top constituents stop falling, it might be very difficult for the S&P Index to rally.

The bottom line is that there is much turbulence in markets today. In additional to supply shock issues, high energy, war, Central Bank tightening, we also have concentration risk. Obviously the more diversified investors are, the better, but when the top S&P 500 components are in most institutional portfolios (directly or indirectly), it’s difficult to avoid concertation risk at the current time. As Apple and other top brass components go, so will markets, for the time being.

Apple is by far the most widely held stock in the world. Either directly or indirectly (via ETFs and Funds), almost all fund managers have some exposure to Apple in their portfolios. And because Apple and several other stocks are so widely held, when markets fall there is a plethora of these names that are sold. And when funds or ETFs have redemptions, fund managers sell what they can, not what they want. And if you have not noticed recently, Apple and the other top components of the S&P have been falling off a cliff.

At the same time, the 10 biggest companies by market cap in the S&P 500 Index comprise about 30% of the total market cap. This means there is the risk of high concentration in indexed products, and the market as a whole.

This was fine when markets were rising and no one questioned the valuation of the top components, but now after 7 weeks of lower lows, investors are asking themselves if Apple and many other stocks were worth what they paid for them.

But whether valuations were warranted or not, the risk of concentration remains. And this in turn might mean that, unless Apple and several other top constituents stop falling, it might be very difficult for the S&P Index to rally.

The bottom line is that there is much turbulence in markets today. In additional to supply shock issues, high energy, war, Central Bank tightening, we also have concentration risk. Obviously the more diversified investors are, the better, but when the top S&P 500 components are in most institutional portfolios (directly or indirectly), it’s difficult to avoid concertation risk at the current time. As Apple and other top brass components go, so will markets, for the time being.

Apple is by far the most widely held stock in the world. Either directly or indirectly (via ETFs and Funds), almost all fund managers have some exposure to Apple in their portfolios. And because Apple and several other stocks are so widely held, when markets fall there is a plethora of these names that are sold. And when funds or ETFs have redemptions, fund managers sell what they can, not what they want. And if you have not noticed recently, Apple and the other top components of the S&P have been falling off a cliff.

At the same time, the 10 biggest companies by market cap in the S&P 500 Index comprise about 30% of the total market cap. This means there is the risk of high concentration in indexed products, and the market as a whole.

This was fine when markets were rising and no one questioned the valuation of the top components, but now after 7 weeks of lower lows, investors are asking themselves if Apple and many other stocks were worth what they paid for them.

But whether valuations were warranted or not, the risk of concentration remains. And this in turn might mean that, unless Apple and several other top constituents stop falling, it might be very difficult for the S&P Index to rally.

The bottom line is that there is much turbulence in markets today. In additional to supply shock issues, high energy, war, Central Bank tightening, we also have concentration risk. Obviously the more diversified investors are, the better, but when the top S&P 500 components are in most institutional portfolios (directly or indirectly), it’s difficult to avoid concertation risk at the current time. As Apple and other top brass components go, so will markets, for the time being.

S&P 500 on the verge of a bear market

Posted on by Vrasidas Neofytou

The Nasdaq Composite, on the other hand, has already entered bear market territory, falling roughly 30% from its highs as the sell-off losses were concentrated in highly valued growth and technology stocks.

Investors are concerned about companies’ capacity to maintain earnings growth at a time when rising interest rates, energy expenses, and lower consumer demand will cut profitability.

Bond traders are also apprehensive that the Federal Reserve may implement numerous half-point interest rate hikes in the coming meetings to bring inflation expectations under control.

Overall, the financial markets have experienced their biggest downturn of this magnitude since the quick bear market in March 2020, at the beginning of the pandemic.

The S&P 500 is nearly 20% below its all-time highs, indicating a bear market, while the Dow Jones is down 15% following its first eight-week losing run since 1923.

The Nasdaq Composite, on the other hand, has already entered bear market territory, falling roughly 30% from its highs as the sell-off losses were concentrated in highly valued growth and technology stocks.

Investors are concerned about companies’ capacity to maintain earnings growth at a time when rising interest rates, energy expenses, and lower consumer demand will cut profitability.

Bond traders are also apprehensive that the Federal Reserve may implement numerous half-point interest rate hikes in the coming meetings to bring inflation expectations under control.

Overall, the financial markets have experienced their biggest downturn of this magnitude since the quick bear market in March 2020, at the beginning of the pandemic.

The main theme of recession threats, rising inflation, and monetary tightening has triggered a larger market sell-off, placing stock markets on the verge of a bear market.

The S&P 500 is nearly 20% below its all-time highs, indicating a bear market, while the Dow Jones is down 15% following its first eight-week losing run since 1923.

The Nasdaq Composite, on the other hand, has already entered bear market territory, falling roughly 30% from its highs as the sell-off losses were concentrated in highly valued growth and technology stocks.

Investors are concerned about companies’ capacity to maintain earnings growth at a time when rising interest rates, energy expenses, and lower consumer demand will cut profitability.

Bond traders are also apprehensive that the Federal Reserve may implement numerous half-point interest rate hikes in the coming meetings to bring inflation expectations under control.

Overall, the financial markets have experienced their biggest downturn of this magnitude since the quick bear market in March 2020, at the beginning of the pandemic.

The main theme of recession threats, rising inflation, and monetary tightening has triggered a larger market sell-off, placing stock markets on the verge of a bear market.

The S&P 500 is nearly 20% below its all-time highs, indicating a bear market, while the Dow Jones is down 15% following its first eight-week losing run since 1923.

The Nasdaq Composite, on the other hand, has already entered bear market territory, falling roughly 30% from its highs as the sell-off losses were concentrated in highly valued growth and technology stocks.

Investors are concerned about companies’ capacity to maintain earnings growth at a time when rising interest rates, energy expenses, and lower consumer demand will cut profitability.

Bond traders are also apprehensive that the Federal Reserve may implement numerous half-point interest rate hikes in the coming meetings to bring inflation expectations under control.

Overall, the financial markets have experienced their biggest downturn of this magnitude since the quick bear market in March 2020, at the beginning of the pandemic.

Euro recovers to $1,07 on hawkish European Central Bank

Posted on by Vrasidas Neofytou

Euro recovered from its multi-year lows after European Central Bank President Christine Lagarde surprised markets by saying policymakers are ready for the first-rate hike as soon as July to curb the record-high inflation.

Hence, the ECB would likely lift the euro area deposit rate out of the negative territory by the end of September and could raise it further if it saw inflation stabilizing at 2%.

On top of the hawkish ECB, the growth-sensitive Euro gets support from the improving market sentiment after U.S. President Joe Biden’s comments on Monday that he was considering easing the trade tariffs on Chinese goods, coupled with some positive news from Shanghai which is ready to emerge from weeks of Covid-led lockdowns.

U.S. dollar’s pullback from 20-year highs:

The DXY-dollar index, which measures the greenback against six major peers dropped to as low as 102 on Monday night, after topping to nearly 20-year peak above 105 marked mid-May by the hawkish Federal Reserve.

The greenback has been falling alongside a retreat in Treasury yields from multi-year peaks, where the yield on the benchmark 10-year Treasury note slipped to near 2.85%, well below the top of 3,20% hit few days ago.

Yields have been falling since last week as investors jumped into the safety of the sovereign bonds after eight straight weeks of losses in stock markets, with S&P 500 trading near a bear market territory after having fallen almost 20%, which it defines as a bear market.

EUR/USD pair, 2-hour chart

Euro recovered from its multi-year lows after European Central Bank President Christine Lagarde surprised markets by saying policymakers are ready for the first-rate hike as soon as July to curb the record-high inflation.

Hence, the ECB would likely lift the euro area deposit rate out of the negative territory by the end of September and could raise it further if it saw inflation stabilizing at 2%.

On top of the hawkish ECB, the growth-sensitive Euro gets support from the improving market sentiment after U.S. President Joe Biden’s comments on Monday that he was considering easing the trade tariffs on Chinese goods, coupled with some positive news from Shanghai which is ready to emerge from weeks of Covid-led lockdowns.

U.S. dollar’s pullback from 20-year highs:

The DXY-dollar index, which measures the greenback against six major peers dropped to as low as 102 on Monday night, after topping to nearly 20-year peak above 105 marked mid-May by the hawkish Federal Reserve.

The greenback has been falling alongside a retreat in Treasury yields from multi-year peaks, where the yield on the benchmark 10-year Treasury note slipped to near 2.85%, well below the top of 3,20% hit few days ago.

Yields have been falling since last week as investors jumped into the safety of the sovereign bonds after eight straight weeks of losses in stock markets, with S&P 500 trading near a bear market territory after having fallen almost 20%, which it defines as a bear market.

EUR/USD pair, 2-hour chart

Euro recovered from its multi-year lows after European Central Bank President Christine Lagarde surprised markets by saying policymakers are ready for the first-rate hike as soon as July to curb the record-high inflation.

Hence, the ECB would likely lift the euro area deposit rate out of the negative territory by the end of September and could raise it further if it saw inflation stabilizing at 2%.

On top of the hawkish ECB, the growth-sensitive Euro gets support from the improving market sentiment after U.S. President Joe Biden’s comments on Monday that he was considering easing the trade tariffs on Chinese goods, coupled with some positive news from Shanghai which is ready to emerge from weeks of Covid-led lockdowns.

U.S. dollar’s pullback from 20-year highs:

The DXY-dollar index, which measures the greenback against six major peers dropped to as low as 102 on Monday night, after topping to nearly 20-year peak above 105 marked mid-May by the hawkish Federal Reserve.

The greenback has been falling alongside a retreat in Treasury yields from multi-year peaks, where the yield on the benchmark 10-year Treasury note slipped to near 2.85%, well below the top of 3,20% hit few days ago.

Yields have been falling since last week as investors jumped into the safety of the sovereign bonds after eight straight weeks of losses in stock markets, with S&P 500 trading near a bear market territory after having fallen almost 20%, which it defines as a bear market.

The common currency Euro hit a one-month high of $1,07 to the U.S. dollar on Tuesday morning, having added almost 350 pips or 3,5% since bottoming at $1,0350 on May 13, driven by the optimism over a July rate hike by the European Central Bank, the improved risk sentiment, and the weaker dollar and bond yields.

EUR/USD pair, 2-hour chart

Euro recovered from its multi-year lows after European Central Bank President Christine Lagarde surprised markets by saying policymakers are ready for the first-rate hike as soon as July to curb the record-high inflation.

Hence, the ECB would likely lift the euro area deposit rate out of the negative territory by the end of September and could raise it further if it saw inflation stabilizing at 2%.

On top of the hawkish ECB, the growth-sensitive Euro gets support from the improving market sentiment after U.S. President Joe Biden’s comments on Monday that he was considering easing the trade tariffs on Chinese goods, coupled with some positive news from Shanghai which is ready to emerge from weeks of Covid-led lockdowns.

U.S. dollar’s pullback from 20-year highs:

The DXY-dollar index, which measures the greenback against six major peers dropped to as low as 102 on Monday night, after topping to nearly 20-year peak above 105 marked mid-May by the hawkish Federal Reserve.

The greenback has been falling alongside a retreat in Treasury yields from multi-year peaks, where the yield on the benchmark 10-year Treasury note slipped to near 2.85%, well below the top of 3,20% hit few days ago.

Yields have been falling since last week as investors jumped into the safety of the sovereign bonds after eight straight weeks of losses in stock markets, with S&P 500 trading near a bear market territory after having fallen almost 20%, which it defines as a bear market.

Terra and Luna’s collapse shakes the crypto ecosystem

Posted on by Vrasidas Neofytou

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

The entire episode calls into question the real-world utility and viability of the stable coins since they were introduced to address the high price volatility of Bitcoin and other altcoins.

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

LUNA, which posted a record-high of 120 dollars last April, lost nearly 99% of its value, dipping to under a penny following the oversupply of the token to save the Terra stable coin.

The entire episode calls into question the real-world utility and viability of the stable coins since they were introduced to address the high price volatility of Bitcoin and other altcoins.

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

The TerraUSD is an algorithmic stable coin pegged to the US dollar in a 1:1 ratio, while Luna was one of the prominent digital coins, ranking among the 10 most valuable tokens in the market.

LUNA, which posted a record-high of 120 dollars last April, lost nearly 99% of its value, dipping to under a penny following the oversupply of the token to save the Terra stable coin.

The entire episode calls into question the real-world utility and viability of the stable coins since they were introduced to address the high price volatility of Bitcoin and other altcoins.

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

Cryptocurrency investors had one of their darkest months in May as they watched Terra’s stable coin losing its dollar peg and the sister token Luna tanking 100% which has shaken the crypto eco-system.

The TerraUSD is an algorithmic stable coin pegged to the US dollar in a 1:1 ratio, while Luna was one of the prominent digital coins, ranking among the 10 most valuable tokens in the market.

LUNA, which posted a record-high of 120 dollars last April, lost nearly 99% of its value, dipping to under a penny following the oversupply of the token to save the Terra stable coin.

The entire episode calls into question the real-world utility and viability of the stable coins since they were introduced to address the high price volatility of Bitcoin and other altcoins.

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

Cryptocurrency investors had one of their darkest months in May as they watched Terra’s stable coin losing its dollar peg and the sister token Luna tanking 100% which has shaken the crypto eco-system.

The TerraUSD is an algorithmic stable coin pegged to the US dollar in a 1:1 ratio, while Luna was one of the prominent digital coins, ranking among the 10 most valuable tokens in the market.

LUNA, which posted a record-high of 120 dollars last April, lost nearly 99% of its value, dipping to under a penny following the oversupply of the token to save the Terra stable coin.

The entire episode calls into question the real-world utility and viability of the stable coins since they were introduced to address the high price volatility of Bitcoin and other altcoins.

The death spiral in the Terra project has temporarily scared investors with the price of Bitcoin falling to as low as $26,000, its lowest since 2020, while the crypto industry lost nearly a half of trillion dollars in market cap.

While the threat of contagion from Terra’s apparent collapse could take months to fully calculate, the crash could result in lawmakers becoming stricter around decentralized stable coins and tokens.

Exclusive Change Capital Ltd is regulated by the Cyprus Securities and Exchange Commission (CySEC) under the licence number CIF 330/17. Exclusive Capital Ltd operates in accordance with the Markets in Financial Instruments Directive (MiFID) of the European Union.

Exclusive Change Capital Ltd is incorporated under the laws of Cyprus, with registration no. HE 337858, regulated by CySEC under license no. 330/17 and has its registered address at Theodorou Potamianou 56, 4th Floor, Kato Polemidia, 4155, Limassol, Cyprus

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66.67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read our full Risk Disclosure.

Restricted Regions: Exclusive Change Capital Ltd, does not provide services to citizens / residents of certain regions, such as Belarus, Belgium, Canada, Cuba, Iran, Iraq, Japan, North Korea, Latvia, Russian Federation, Sudan, Syria, Turkey, The United States and Ukraine.

ISO 27001:2013

The services are delivered under the controls established by information security management systems in conformity with ISO/IEC 27001:2013, and we are certified by MSECB.

Copyright ©️ 2017-2024 Exclusive Change Capital Ltd

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