- Coin Bureau shared a video on YouTube explaining how various macroeconomic factors contributed to the recent market crash.
- Their analysis in the video pointed out how some of the latest economic data contributed to the uncertainty in the crypto market.
- Some of the other topics discussed in the video were BRC-20 tokens as well as the newest controversy surrounding Terra.
In their latest YouTube video, Coin Bureau took a deep dive into the underlying causes behind the recent market crash, shedding light on several key events. Among the highlights were the U.S. debt ceiling debate and the temporary pauses in BTC withdrawals on Binance. The video also explored the impact of BRC-20 tokens and the ongoing Terra controversy.
The sudden crash in the crypto market began when U.S. authorities announced an investigation into Binance for alleged sanctions violations. The release of the Consumer Price Index (CPI) for April and concerns over inflation that followed had then strengthened the market’s downturn.
Furthermore, the likelihood of another interest rate hike by the Federal Reserve also increased, causing hundreds of millions of dollars in liquidations from leveraged long traders. Meanwhile, the Bitcoin blockchain also faced congestion and skyrocketing transaction fees due to the popularity of BRC-20 coins and ordinal NFTs.
This resulted in two temporary pauses in BTC withdrawals on the Binance exchange. The block size debate also resurfaced as institutions attempted to accommodate these transactions on the Bitcoin blockchain. This led to layer 2 networks like the Lightning Network being seen as more suitable for processing certain types of transactions.
Coin Bureau also discussed Terra, which recently faced new controversies involving its co-founder and a lawsuit against Jump Trading. Disgraced co-founder Do Kwon was released on bail after being on the run since May last year, while Jump Trading was accused of price manipulation after they had pumped Luna and UST.
The US government’s debt ceiling debate also raised concerns as politicians postponed an important meeting, increasing the risk of default. This created uncertainty in the markets, but surprisingly, the impact on stocks and other financial assets was relatively muted, according to Coin Bureau.
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