Crypto News: ETH FUD, BRC-20, Meme Coins, Debt Ceiling & MORE!

**Crypto Market Crash: BTC Drops by More Than 10% in a Week**

The crypto market experienced a sudden crash last week, with Bitcoin (BTC) dropping by more than 10% in just a week. This downward trend can be attributed to a combination of macro and crypto factors. One of the main factors contributing to the market crash was the announcement that U.S authorities were investigating Binance for alleged sanctions violations. This news caused the market to trade sideways before crashing further.

Another factor that suppressed crypto prices was the exit of two major market makers, Jane Street and Jump Crypto. Both companies cited regulatory uncertainty as the reason for their exit. This resulted in less liquidity and market depth, making it easier to move prices up or down. As a result, there were hundreds of millions of dollars of liquidations from leveraged long traders, further impacting crypto prices.

Additionally, there were rumors that the U.S government had begun selling some of its BTC holdings. While the government had sold some BTC back in March, the recent absence of sell pressure over the weekend suggests that the government may have been selling BTC on the spot market. This uncertainty has caused BTC to break below the key level of $27k, and it could potentially fall as low as $24k in the coming days.

**Bitcoin Blockchain Concerns: BRC20 Meme Coins and NFTs Clog Up the Network**

In addition to the market crash, the Bitcoin blockchain has been experiencing significant congestion due to the popularity of BRC20 meme coins and NFTs. Transaction fees have soared to levels not seen since the previous bull market, and there are hundreds of thousands of pending transactions. This congestion has caused exchanges like Binance to temporarily pause BTC withdrawals to increase the withdrawal fee.

The debate around whether Bitcoin’s block size should be increased to accommodate these types of transactions has been reignited. However, the consensus seems to be that layer 2 networks like the Lightning Network are the proper place to process certain types of transactions. The recent migration to layer 2 networks could be evidence that other Bitcoin forks saw a similar adoption effect.

**Ethereum Finality Issues: Beacon Chain Temporarily Stops Processing Transactions**

Last week, Ethereum experienced two finality issues, causing the Beacon Chain to temporarily stop processing transactions. Despite this, the news had little effect on ETH’s price, and it actually increased in value relative to BTC on the same day the issues occurred. Ethereum developers quickly identified and fixed the source of the finality issues over the weekend.

The recent activity on the Beacon Chain has been burning ETH, making it deflationary. This trend shows no signs of slowing down, and it could have a positive impact on the price of ETH. However, a regulatory crackdown by the SEC or issues related to stablecoins could potentially harm ETH’s price.

**Terra’s Troubling Updates: Disgraced Co-Founder Released on Bail, Lawsuit Against Jump Crypto**

Terra, a crypto project that collapsed over a year ago, has been facing troubling updates. Disgraced co-founder Do Kwon was released on bail after being on the run from authorities since May last year. He was arrested in Montenegro in March while attempting to fly using fake documents. Additionally, Jump Crypto, a major market maker, was hit with a lawsuit for allegedly propping up Luna and UST, Terra’s stablecoin.

There have been suspicions that Jump Crypto was the unknown entity that initially caused UST to depeg. U.S authorities are reportedly probing Alameda Research’s plans to bail out Terra before its collapse. The collapse of Terra caused significant damage, with losses amounting to $83 billion.

**Debt Ceiling Debate: U.S Politicians Postpone Meeting as Government Nears Default**

Top U.S politicians have postponed an important meeting as the government comes dangerously close to defaulting on its debt. The U.S government hit its borrowing limit of $31 trillion back in January and has been spending money from its bank account at the Federal Reserve since then. If the government runs out of money, it won’t be able to finance its public services or pay the interest on its debt.

A debt default would have significant consequences for the financial system, as U.S bonds are considered the highest quality collateral. This includes stablecoins, which are backed mostly by U.S government debt. The potential default or even the perception of risk could cause market volatility, with stocks crashing and stablecoins de-pegging.

**Last Week’s Top Performing Cryptos and Where They Could Be Headed Next**

Last week, the top performing cryptos were Carver, Bitcoin SV, Lido Finance, UNI, and Rocketpool. Carver’s price rallied on the release of a new roadmap for Carver’s EVM compatibility. Bitcoin SV’s price increased due to the bloat on the original Bitcoin blockchain. Lido Finance saw a rally on the approval of the liquid staking protocol’s V2 upgrade. UNI’s price performance is dependent on Bitfinex’s trading activity. Rocketpool’s price saw a small gain, but no specific catalyst could be identified.

It’s important to note that while these cryptos performed well last week, their long-term price actions vary. Some are in clear downtrends, while others are in uptrends. It’s crucial to analyze each crypto’s fundamentals and market conditions to determine their future price movements.

**FAQs**

**1. What caused the crypto market crash last week?**

The crypto market crash was caused by a combination of macro and crypto factors. The announcement of U.S authorities investigating Binance for alleged sanctions violations, the exit of major market makers, and rumors of the U.S government selling BTC all contributed to the market crash.

**2. Why is the Bitcoin blockchain experiencing congestion?**

The Bitcoin blockchain is experiencing congestion due to the popularity of BRC20 meme coins and NFTs. Transaction fees have soared, and there are hundreds of thousands of pending transactions, causing delays and higher fees.

**3. What are the implications of Ethereum’s finality issues?**

Ethereum’s finality issues temporarily halted transaction processing on the Beacon Chain. However, the market did not react significantly, and ETH actually increased in value relative to BTC. The recent activity on the Beacon Chain has been burning ETH, making it deflationary.

**4. What are the troubling updates regarding Terra?**

Terra’s co-founder, Do Kwon, was released on bail after being on the run from authorities. Jump Crypto, a major market maker, was hit with a lawsuit for allegedly propping up Luna and UST. The collapse of Terra caused significant losses, amounting to $83 billion.

**5. What are the potential consequences of the U.S government defaulting on its debt?**

If the U.S government defaults on its debt, it won’t be able to finance its public services or pay the interest on its debt. This could have significant consequences for the financial system, as U.S bonds are considered the highest quality collateral. Stablecoins, which are backed mostly by U.S government debt, could de-peg, causing market volatility.

**6. Which cryptos were the top performers last week?**

The top performing cryptos last week were Carver, Bitcoin SV, Lido Finance, UNI, and Rocketpool. Each crypto had its own catalyst for price performance, such as new roadmap releases, upgrades, or trading activity on specific exchanges.

**7. What should investors consider when analyzing the long-term price actions of cryptos?**

When analyzing the long-term price actions of cryptos, investors should consider the fundamentals of the project, market conditions, and any upcoming developments or regulatory risks. It’s important to conduct thorough research and analysis before making investment decisions.