It must be a tough week for the whole crypto market. Rumors said BlackRock and Citadel were the hedge funds that created the short UST attack (they denied it, though) on May 10. This caused the continued FUD on UST and LUNA.
UST, a USD stablecoin, de-pegged and slumped to the lowest price at $0.3. LUNA crashed over 99%.
Traders are crazily removing assets from LUNA. LUNA daily active address surged 720% from 198 on May 8 to 1,623 on May 11. LUNA on-chain transfer also increased dramatically 450%.
Our partner Candlestick reveals that early liquidity withdrawal happens before the UST attack.
Ps, 6 days away from Candlestick whitelist registration close and Beta launch.
BTC backing is one of the key elements of supporting the UST peg. The forced selling of the Bitcoin (BTC) holdings backing a portion of UST influenced BTC’s current drop to $28,000.
UST crash, BTC drop, ETH slump, etc. In this whole-red market, where are the assets moving to? Traders need to find a relatively-safer place to keep their assets.
Compared with UST which put a large portion of assets on BTC as backed, DAI may be a safer choice as a bucket of cryptos backs it. Crypto traders now embrace DAI as a better decentralized stablecoin option in the market. DAI reached $1.04 on May 12.
Another one is USDC. Different from DAI and UST, USDC is backed by USD. Circle puts 1 USD into the bank for 1 USDC issued. USDC reached $1.06 on May 12.