(UST) Terra Luna crashes and further shakes confidence in the entire crypto market
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Terra Luna Crashes
The recent crash of one of the most well known cryptocurrencies has added to the widespread panic that has been surrounding the risky asset class. The fall started while the company's stable coin, UST, was unable to maintain its parity with the USD and quickly tumbled as more investors opted to save whatever they had left and exit their positions. While Terra Luna is not the only crypto to be dropping significantly in the last few days, with the entire top 100 down around 30-50% and market cap falling to $1,19 Trillion, it is certainly one of the most prominent examples seen to date of a complete collapse. This event has deeply shaken investor confidence in the asset class and has even led to the most prominent stable coin , USDT losing its 1:1 ratio with the USD. As the situation continues to evolve it seems like this could be the beginning of a significant realignment in the crypto industry as investors either exit their positions or re-evaluate them in search of some sort of a safe haven amid a widespread crash. It is important to note though that the majority of risk-on assets have been deeply impacted by worsening global economic conditions and central bank policies so while this situation is not exclusive to crypto's it is certainly most prominent with them.
UK GDP report disappoints and pressures GBP and FTSE100
The UK GDP report was released at 7:00 am BST and turned out to be a huge disappointment with the report showing a 0.8% QoQ expansion in Q1 2022 while the market expected an expansion of 1% QoQ. However, March's monthly GDP reading was the biggest disappointment with the monthly reading which was expected to show a 0.1% expansion from February levels and instead showing a 0.1% MoM contraction. March was the first full month since the beginning of the Russia-Ukraine conflict and could be seen as a potential sign of economic difficulties to come.
Investors reacted negatively to this news with both the British Pound and FTSE100 taking a hit as the global sentiment continues to shift more towards risk-off
Furthermore, the Bank of England warned that tightening and current geopolitical developments are likely to push the UK economy into recession. Investors reacted negatively to this news with both the British Pound and FTSE100 taking a hit as the global sentiment continues to shift more towards risk-off.
