It’s been a sea of red in the cryptocurrency space over the last week, causing the market capitalization to fall below its $1.7 trillion mark to currently stand at $1.64 trillion as of the time of this writing. Flagship cryptocurrency Bitcoin posted a weekly decline of 7.13%. However, Thursday turned out to be a blood bath in the space as the U.S. Fed policy decision weigh in on markets. This saw Bitcoin lose almost $4,000 in 24 hours from the high of $39,000’s, to trading as low as $35,482.13 on Friday.
The declines seen in the market during the week were as a result of a stronger dollar, caused by the United States Federal Reserve policy decision to increase interest rate by 0.50%. The Fed raised its policy interest rate by 25 basis points in March, point that the financial watchdog is likely to start trimming its asset holdings, as it attempts to tighten pandemic-era monetary policy and rein in soaring inflation.
The increase in interest rate saw it get hiked to 1%, the largest increase since 2000, as it handed down its policy decision on Wednesday. The decline is the effect of the policy decision made by the federal reserve. The dollar index, which is the measure of the strength of the U.S. dollar currency, traded as high as 104.097 basis points during the week, which represents a 20-year high.
As you would expect, with Bitcoin posting declines, so has the altcoin market, with majority of the top 50 cryptocurrencies losing 10% and more. The biggest decline of the top 50 comes from CRO, the native token of Crypto.com’s blockchain.
The reason for the decline is that on May 1st, the company announced an update to the CRO Rewards program. The changes to the rewards structure don’t become effective until June 1st, but they are significant changes. It saw most of its rewards cut down by 30% and more and because the rewards got cut down, the appeal to hold the token diminished, coupled with the general market downturn we are experiencing.
Although we saw declines for the week, these coins TRON, ALGO and ANC defied the natural trend as they posted gains for the week. Here’s why:
Tron TRX (26.45%)
Tron is a decentralized blockchain-based operating system developed by the Tron Foundation and launched in 2017. Originally TRX tokens were ERC-20-based tokens deployed on Ethereum, but a year later they were moved to their own network.
The platform was built to create a decentralized Internet and serves as a tool for developers to create dApps, acting as an alternative to Ethereum. Anyone can create dApps on the TRON network, offer content, and in return receive digital assets as compensation for their efforts.
The reason for the rally is as a result of Tron DAO announcing the rollout of a new programmable stablecoin called USDD. The algorithmic stablecoin would be based on the Tron network, which means that its supply mechanism would be tied to TRX. As a consequence, the demand for TRX would increase due to the utility tied to the USDD stablecoin.
The USDD stablecoin will operate on the TRON network with an initial total supply of 100 million. It has been launched on decentralized exchanges such as Sunswap, Sun.io, Curve, Uniswap, Ellipsis, Pancakeswap, and Kyberswap. USDD is pegged to the U.S. dollar (USD) via TRX.
In addition, USDD connects the two blockchains of Ethereum and BNBChain through the BTTC cross-chain protocol and will be integrated into more blockchains in the future. At present, the circulating supply of USDD in these two blockchains is close to 20 million.
The anticipated demand for TRX triggered the wave of heavy volumes in the last few days ahead of the stablecoin launch. TRX’s market cap metric registered a solid uptick in the last five days, reflecting the heavy inflows registered. Also, its volume metric registered a strong volume uptick during the same period.
Algorand ALGO (7.22%)
Algorand is a self-sustaining, decentralized, blockchain-based network that supports a wide range of applications. These systems are secure, scalable and efficient, all critical properties for effective applications in the real world. Algorand will support computations that require reliable performance guarantees to create new forms of trust.
Algorand was invented to speed up transactions and improve efficiency, in response to the slow transaction times of Bitcoin and other blockchains. Algorand is designed so that there are lower transaction fees, as well as no mining (like Bitcoin’s energy-intensive process), as it is based on a permissionless pure proof-of-stake (PoS) blockchain protocol.
The reason for the rally is because Algorand was announced as FIFA’s Official Blockchain Sponsor. Fèdération Internationale de Football Association (FIFA) is the world’s largest football governing body. Its deal with blockchain technology company Algorand explains that the collaboration involves a sponsorship and “technical partnership” agreement.
The technical partnership deal means Algorand will help FIFA develop its digital assets strategy. In addition, FIFA will provide the platform for Algorand’s global awareness through advertising, media exposure, and promotional opportunities.
Anchor Protocol ANC (10.23%)
Anchor Protocol is a lending and borrowing protocol offering up to 19.5% yield on stablecoin deposits. Lenders can deposit their UST and earn attractive rates on their investments while simultaneously benefiting from low volatility. Borrowers can turn their LUNA collateral into productive assets without giving up control of it. Anchor Protocol is the Terra blockchain’s biggest DeFi platform with a Total Value Locked of $16.45 billion.
The rally can be linked to the fact that the Luna Foundation Guard (LFG) announced that they have bagged another $1.5 Billion worth of Bitcoin to back its UST programmable stablecoin. The LFG got $1 billion worth of BTC by on the counter (OTC) swap for UST. This transaction was backed by a digital currency prime broker, Genesis. While other $500 million worth of Bitcoin purchase was made with the help of Three Arrows Capital (3AC).
Also, Anchor offers the highest annual yield among any DeFi platform, at 18%. This makes it extremely attractive for returns in times of market duress. ANC benefits from any inflows to the platform, given that it is Anchor’s governance token.
Related
This news is republished from another source. You can check the original article here
Be the first to comment