Summary: From being intensively correlated to the equity market this year, the crypto market deviated significantly last week when it tumbled. This might indicate that investors are now more willing to take on risk in the equity market than in crypto. Terra, the crypto that blew up earlier this month launches a version 2.0 but is somewhat ignoring that it has caused a meltdown worth billions.
Ethereum traded the lowest against Bitcoin this weekend since October last year at 0.06 ETHBTC. So even though the highly anticipated Ethereum merge is coming up, it seems that Bitcoin is still perceived as the safest crypto asset, which investors are more unwilling to liquidate in times of risk-off and increased uncertainties compared to Ethereum and other cryptocurrencies. Based on this matter, it is likely to see Ethereum and other cryptocurrencies percentage-wise tumbling more if Bitcoin breaks support at 28,500.
At some point, one should acknowledge one’s defeat and let a project die out. Terra should have been such a project. In our view, Terra has already caused enough harm to individuals and the crypto market as a whole. It genuinely seems the people behind Terra believe that they can always give it a new shot, in case their first effort did not turn out well, thus neglecting that their flawed design has already caused a meltdown worth billions. The case of Terra does not put the crypto market in a good light nor does the Terra 2.0 narrative of “let us just try again”. The crypto market should focus on projects that create value to become something else than a speculative asset class.
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