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The bulls have reclaimed control of the situation. The following are the primary elements that have contributed to the rally.
On March 19, Luke Lango informed members of his Crypto Investor Network that Bitcoin (BTC) had completed two pennant formations: short-term negative and long-term bullish. Luke predicted that "Bitcoin is about to either make a massive move higher or lower" before April, depending on which option triumphed.
The breakout did, indeed, arrive yesterday... And the bulls have regained control! While stock indexes have been stagnant for about a week, Bitcoin (BTC) has broken above $47,000, while Ethereum (ETH) is on track to reach $3,500, a level not seen since January. The following are the top stories that have been recognised as important contributions to the rally.
Terra Purchasing Massive Amounts of Bitcoin for Stablecoin Reserves
Terra (LUNA), whose UST stablecoin has skyrocketed in popularity throughout the crypto winter, has been on a bitcoin buying spree to ensure that it remains so. Terra intends to gather $10 billion in "digital gold" as reserves to back up its stablecoin before it is finished.
Terra's most recent purchase (published by Blockworks this morning) totals $133.6 million, and that's just one batch; Terra is supposed to buy roughly $125 million in BTC per day! "These daily purchases might possibly extend for months if Terra does indeed intend to attain to $10 billion in BTC reserves," writes George Kaloudis in CoinDesk's Crypto Long & Short newsletter yesterday.
"If successful, UST might become a dollar stablecoin backed by a digital asset that is totally auditable, transparent, and decentralised." "That is significant," Kaloudis concludes. "You won't have to rely on Terra founder Do Kwon or an accounting company that will qualify its claims with weasel phrases. On the blockchain, you'll be able to see for yourself."
Even before the news broke, Terra had risen to the second-best smart-contract platform in terms of total value locked (TVL), according to Messari. At $110.5 billion, Ethereum still reigned supreme, while Terra's $20.3 billion considerably surpasses the rest of the pack:
Why has Terra accelerated so quickly? To generate big yields, many people are staking or employing debt protocols on the Terra network.
Anchor Protocol (ANC), the largest, pays 19.5 percent on your UST! The Anchor community just passed a new "semi-dynamic earn rate" policy to preserve its position – and its users.
Previously, Anchor's yield was set at 19.5 percent...a position that some thought was unsustainable. Now, depending on whether the yield reserves have risen or declined that month, your yield might climb (or fall) by 1.5 percent each month, "contributing to Anchor's long-term stability." Even 18 percent is a fantastic yield – and it may potentially drive more users to Terra because to its emphasis on safety and stability.
Fear of Missing Out on the Ethereum Merger
Meanwhile, cryptocurrency observers such as Ilan Solot of Tagus Capital claim that "FOMO (fear of missing out) is kicking for ETH pre-merge."
The Ethereum Foundation has pledged for years that it will transition ETH from a proof-of-work to a proof-of-stake consensus method. As we can see on the Bitcoin network, the current setup necessitates a significant amount of electrical power. Furthermore, it contributes to substantially higher "gas fees" and slower performance for Ethereum compared to its proof-of-stake counterparts.
However, Ethereum's Beacon Chain, which has begun to integrate proof-of-stake, is set to combine with the main Ethereum network in June. At that point, proof-of-work is obsolete, and Ethereum can provide a user experience similar to, say, Solana (SOL).
Several of the largest crypto breakouts have been ERC-20 tokens on Ethereum, while the Merge rumour mill churns:
* Gnosis (GNO), a prediction market specialist, has gained 60% in the last seven days.
* Holo (HOT), a cryptocurrency that connects blockchain apps to the rest of the internet: 50% increase
* Convex Finance (CVX), a staking platform with 6%+ yields: +50%
* Loopring (LRC), the company that will host GameStop's (GME) NFT marketplace: +40%
* Chiliz (CHZ), which offers sports fan tokens: +38%
MiCA Relaunches Without a Bitcoin Ban
In terms of proof-of-work: Bitcoin is unpopular with environmentalists due to its high energy consumption. I've previously stated that Bitcoin has the potential to lead the charge towards clean energy. But, for the time being, cynicism is understandable.
Fortunately for BTC investors, crypto rules have advanced again again without outlawing proof-of-work.
While the EU was debating its Markets in Crypto Assets (MiCA) bill, bitcoin detractors attempted to outright ban proof-of-work — but that proposal was thrown down in committee on March 14.
The "trilogue" comprising the European Parliament, the Council of the EU (heads of state), and the European Commission will then debate MiCA (executive branch).
Meanwhile, there were "concerns that other EU leaders in support of limiting the use of proof-of-work cryptocurrencies will make one more attempt," according to CoinDesk, but they've now missed their deadline. The environment will continue to be a key source of worry... However, regulators are at least willing to study the choices.
Of course, countries outside of the EU are warming to – and even embracing cryptocurrency. After all, it's a New Digital World, and politicians will have to adapt to it sooner or later.
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