today dogecoin surges after elon musk becomes twitter's single largest shareholder the sec rejects kathy wood's bitcoin spot etf and how tara's massive bitcoin buy could bring crypto investors off the sidelines [Music] welcome to cbc's crypto world i'm pippa stevens digital currencies are starting the week lower and the market as a whole fell about 2 by noon eastern nbitcoin dropped about one and a half percent ether fell by two percent and ripples xrp fell by 2.1 let's talk about what analysts are,watching jp morgan says the upside for
crypto could be limited thanks to falling stable coin holdings the share of total crypto market cap taken up by stable coins fell from 10 at the beginning of march to 7 jpm also found that ethereum is back in overbought territory short coverings or when investors buy back an asset to close a short position has been more intense for eth than for bitcoin and over at citi they expect bitcoin prices to remain highly volatile as global factors like regulation in the us and abroad continue to weigh on the digital currency now for the top stories elon musk just bought a giant stake in twitter and the move sent the stock price and dogecoin soaring the meme cryptocurrency gained as much as 10 percent after musk bought a 9 stake in the company valued at,
cryptocurrency about halfway towards its goal of building a three billion dollar reserve for its stablecoin ust in fact terra is now the third largest holder of bitcoin behind microstrategy and tesla but the project's founder wants to go even further he's interested in buying 10 billion dollars worth of bitcoin for tariffs reserves all in the hopes of making the stable coin well more stable crypto world host naia mckeel spoke to jan lieberman co-founder of delphi digital about the billions in bitcoin purchases and importantly what it means for bitcoin investors we've been talking about tara a lot this past week it's luna token hit an all-time high last week the organization,
that initially launched the tarot blockchain terraform labs it's been buying bitcoin in troves and that has sort of helped push the price of bitcoin higher it's building a reserve for its stablecoin ust so what do crypto investors need to know and i know that you at delphi are specifically pretty bullish on tara and i think we're going to get to that in a bit but let's actually start with the investors in bitcoin what do you make of the way that terraform labs has beenhelping the bitcoin price this past week and how do you think that uh you know its goals can continue to.
serve as a positive as a positive catalyst for the price of bitcoin on an absolute basis the the volume of bitcoin is is you know dwarfs the the purchasing levels that they're doing and so realistically it doesn't necessarily move the needle on its own but but it's still a verysubstantial amount particularly because it is one directional and not necessarily just a trading kind of situation and and so you know bitcoin was already moving up prior tothe purchases but um once those come in it's a narrative that picks up and so you see a lot of other buying that comes in and so yes the amount that they're buying on an absolute basis isn't significant but,
it's the kind of the demand that accompanies it from everyone else that's potentially sidelinedeither you know waiting to see how markets shake out or looking for a new catalyst before really allocating back into the space there's the tara blockchain itself the governance token luna and then separately there's the ust stablecoin that was sort of helping make headlines this past week so what is the difference between the three and what is it that investors need to know about each absolutely so terra is isn't layer one blockchain you know if you think about it it's a settlement layer like ethereum like solana like avalanche and then the ideas you protocols are built on top of it that leverage the security of the underlying chain and um that's how value.
accrues where the more kind of adoption and growth you see in these individual ecosystems the the more kind of upside you start to see in the layer one chain and so you think of it as a kind of a way to each of these are their own internet to an extent and this is one way to actually monetize the underlying base layer on top of which everything is built and so in that sense it it's similar but that's glossing over a lot of details uh in terms of their differences and then zooming in a little bit further in terms of where ust comes into play um so tara or luna stakers that run these validators are what actually secure the chain then on top of that they're building a decentralized stable,
coin so you have uh you know the the product market fit for stable coins is is massive um you know things are going to continue to be priced in the dollar for the foreseeable future and and that's what people want to interact with but having one that's actually decentralized is a massive um opportunity and so you you know you have these others like usdc usdt and and the ideas that those are fully collateralized and and people you know that creates a huge sense of comfort i want to go a little bit further on algorithmic decentralized stable coins because from what i gather that to people in the crypto community is sort of the holy grail uh and as you mentioned before we often talk about tether usdc uh these stable coins that are backed by centralized organizations,
uh also pegged to the dollar but what uh you know i've been talking to people over the past week about this and from the sounds of it ust is the most popular effort to date for an algorithmic decentralized stable coin why is that what's different this time so even looking at others like usdc you know it's one to one you deposit there's there's am central entity holding stables that collat or rather dollars that collateralize a stable coin um die is more so a product of leverage rather than demand and the difficulty with algorithmic stable coins has generally been um,
scaling or ensuring that supply scales with demand on a pretty um appropriate basis where you can either incentivize supply expansion but then you don't necessarily have the demand that can justify it and that's when these things can fall apart particularly if they overheat and then you know it doesn't really there's a big mismatch there whereas here the idea is um they're they've built this kind of massive ecosystem that helps support the demand for ust and then now what's helping with the bitcoin side is so previously it was purely um collateralized by luna and so uh the risk was always in these massive downturns the the negative is that you,
know people fear for the stability of the peg and then as a result they they exit the system and the way you exit the system is by minting luna and so if others think that there's going to be this massive run then what happens is there's a lot of reflexivity as people luna sell it and then gradually and then everyone who else who holds luna is also afraid of this happening and so you kind of get this reflexivity downwards um what was was very telling is you know it it's all these work well when markets are doing well but when in these massive downturns is really where you can really see the stress test and you know going back to may is very promising to see um at the time how well it was able to hold up all things considered and so i think it's it the the real confidence builds in its ability to endure really trying times and and sowe've had that already happened but now,
we're introducing a new variable and that's where bitcoin comes in and so bitcoin will effectively function as a comparable alternative to luna in the minting and burning mechanism so if individuals want to um redeem ust they can now redeem it for bitcoin rather than necessarily needing to mint luna and then at the same time if they want to mint ust they can deposit more bitcoin and and and mint that luna ermit that ust before we go we want to remind you that you can watch that full interview over on cnbc.com crypto world that's all for today's show but we'll be back again tomorrow and we'll see you then [Music].
0 Comments