Russian Market

2022-05-19 13:40:24 Cisco earnings add to markets turmoil

American technology company Cisco Systems reported flat revenues of $12.8 billion year on year, falling short of estimates of $13.3 billion.

Orders were decent with product order growth of 8%, but the company was impacted by approximately $200 million in revenue loss due to its decision to exit Russia and Belarus. It also said the Covid lockdowns in Russia impacted its quarter, although the fundamentals drivers remain strong.

The stock tumbled 12% in after-hours on growth worries. The market is sensitive to any earnings disappointments, following earnings from Walmart and Target sparked growth concerns over the state of the consumer and rapidly rising costs, impacting margins. Nasdaq futures are continuing lower this morning down more than 1% as investors rush for the exit. The US 10-year is sinking below 2.85% in a risk-off trade.

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2022-05-19 12:09:15 Bitcoin's price dropped below its fair value

For the first time in almost a year Bitcoin is trading below its Fair Value according to data by ByteTree.

The Fair Value is calculated based on network activity and then measured against the actual price of bitcoin. It is using the Network Value to Transaction ratio.

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2022-05-19 10:02:52 Market Overview

BTC price trades below $30K

The Top-10 are traded in red zone:
ADA -10.1%
SOL -9.5%
XRP -5.9%

Market cap: $1.31T (-3.67%)
BTC dominance: 42.29% (+0.72%)
Fear & Greed Index: 13 (Extreme Fear) Open / Comment

2022-05-18 23:33:58 Terra investor Mike Novogratz breaks his silence

After not tweeting since May 8, Galaxy Digital CEO Mike Novogratz today tweeted a memo to shareholders and stakeholders describing the Terra meltdown.

Galaxy has invested in the Terra ecosystem since September 2020, before it became a top-10 blockchain. In January, Novogratz proudly showed off his LUNA tattoo. "My tattoo will be a constant reminder that venture investing requires humility,” the billionaire lamented today.

"The downward pressure on reserve assets coupled with UST withdrawals, triggered a stress scenario," Novogratz writes. The UST algorithmic stablecoin was "a big idea that failed."

Novogratz argues that Galaxy could survive the crash because it diversified its portfolio and frequently took profits instead of letting it all ride.

As of December 31, Galaxy owned over $400 million worth of LUNA. Last week, Galaxy Digital was forecasting a $300 million quarterly loss as its equity fell 12% to $2.2 billion.

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2022-05-18 20:08:45 Crypto in Russia will be legalized, says Minister of Industry and Trade

Cryptocurrency in Russia will definitely be legalized, said the Minister of Trade and Industry of the Russian Federation Denis Manturov.

"The question is when it will happen, how it will happen, and how it will be regulated – now both the Central Bank and the government are actively engaged in this, but everyone is prone to understanding that this is a trend of the time, and sooner or later, in one format or another, it will be implemented," he said.

According to the minister, the crypto circulation must be legal, correct and comply with the rules to be formulated.

The announcement marks a U-turn in regards to the crypto legalization in Russia, as earlier on April 7, Russian Prime Minister Mikhail Mishustin spoke out against recognizing cryptocurrencies as legal tender and said that this cannot be done.

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2022-05-18 18:55:01 Bitcoin won’t become 'an alternative form of money,' says former Fed chair

Former US Federal Reserve Chairman Ben Bernanke said in a recent interview that cryptocurrencies could never be successful as alternative money, since they failed to meet expectations as substitutes for fiat currency.

Bernanke made the argument that if BTC was a replacement for fiat money, it could be used to buy groceries, but no one uses Bitcoin to buy groceries because it's too expensive and inconvenient. Moreover, product prices regularly fluctuate against BTC, which again is a hindrance to the adoption of it as a medium of exchange.

Bernanke also does not agree with the comparison of Bitcoin to "digital gold." He explained that gold has an an underlying use-value that people use for filling cavities, while the underlying use-value of Bitcoin is in things such as ransomware. Thus, Bernanke believes that the "main use" of Bitcoin is within underground economies for aiding illegal activity.

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2022-05-18 17:25:08 EU may start testing CBDC in 2023

Executive Board member of the European Central Bank (ECB), Fabio Panetta, said in a lecture at the National College of Ireland that the ECB is working on a preparation phase to launch the Digital Euro. This phase will be completed in late 2023, allowing EU member countries to test the new CBDC for the next 3 years before making it publicly available.

Panetta said during his speech that the digital euro could boost the European economy when used as legal tender among all EU members. He also noted that the ECB and other institutions will help stimulate adoption through various tactics, including a heavy advertising campaign.

According to Panetta, the digital euro could help preserve confidence in fiat money by helping to "maintain its role as a monetary anchor in the digital age," a role it has lost due to the erroneous monetary policies that have been carried out in different countries to try to safeguard the economy.

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2022-05-18 17:05:59 Stocks whipsaw as Fed scares

Hawkish comments from Fed Chair Powell on Tuesday added to traders' fears that the Fed will tighten very aggressively.

The dollar snapped a three-day losing streak as 10-year Treasury yields came back above the 3% level. Futures are lower by 0.7% for the S&P500 and 1% for the Nasdaq. Adding to the market nervousness, Target Corp tumbled more than 20% in pre-market after lowering its profit forecast due to a surge in costs. Bitcoin continues to trade slightly below $30,000 as investors remain nervous about whether the correction is over.

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2022-05-18 16:07:28 Terra founder Do Kwon faces lawsuit

According to local media reports, several South Korean LUNA and UST holders have decided to hold Kwon accountable for the recent price collapse. They are represented by the law firm LKB & Partners, whose employees are also reported to be LUNA holders.

The lawsuit holds Kwon civil and criminal liability for the Terra crash. A police complaint against Kwon will also be filed in Seoul. The South Korean government is reportedly considering summoning Kwon to testify at the hearing as well.

Media reports suggest that several Terra holders have also come together to form an online group called "Terra Luna Coin Victims". The group has over 1,500 members and is likely to pursue further lawsuits against Terrform Labs.

Earlier last week, Terra's in-house legal team resigned. General counsel Marc Goldich, chief corporate counsel Lawrence Florio and regulatory counsel Noah Axler have left their positions.

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2022-05-18 15:18:35 S&P500 set to rise

After correcting for almost 20% since its highs, the S&P500 is showing strength for the past 3 sessions, bouncing 5%. While tightening is an important headwind for asset prices, strong consumer spending and business activities so far in the US are providing support to US equities and increasing their appeal compared to stocks from other regions in the world.

From a technical basis, the US benchmark has finally managed to break and hold above a key moving average indicator. Looking at the chart, if current levels hold, traders are likely to retest the 4,300 level on the S&P500.

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