Business Week: Crypto’s “death spiral”

In what some call a “death spiral,” the value of a number of digital currencies plummeted last week, shattering investor confidence in cryptocurrency markets. The implosion was particularly upsetting for TerraUSD, or UST, which is called a stablecoin, which means it is pegged to a stable asset and shouldn’t fluctuate in price. But the fluctuation did it: A large sell-off in a sister cryptocurrency brought UST to as low as 11 cents on Friday when Luna, a token closely related to UST, plummeted to $ 0. falling along with the Nasdaq, a weighted benchmark for tech stocks, making a cryptocurrency investment as risky as any other tech stock. the The collapse brings home an unpleasant reality for investors: that an asset they hoped would transform has failed to deliver on its promise.

Elon Musk said he was making his $ 44 billion offer to buy Twitter. “temporarily on hold“while looking for more details on the share of spam and fake accounts on the platform, which Twitter estimated at around 5%. Mr. Musk made the announcement in a morning tweet on Friday, followed by another who said he was” still busy. “In the deal. While trying to discern the fickle billionaire’s motives may be futile, Mr. Musk could use a tactic to lower the price of the acquisition or consider giving up on the deal altogether. The latter would be expensive: the deal. Mr. Musk’s agreement with Twitter includes a Breakup fee of $ 1 billion as well as a clause that could force Mr. Musk to pay the deal if he still has the financing. Tweets from him came the day after the Twitter CEO he fired two top executives, he froze most of the new hires and said he was cutting back on spending. Earlier in the week, Mr. Musk said he would allow former President Donald J. Trump to do so return to the platform.

Annual inflation slowed in April for the first time in months, but the consumer price index, which measures changes in the prices of consumer goods and services, increased by 8.3 percent. That number is uncomfortably high for households who have struggled with rising prices of essential goods like food, fuel and housing for months, and it’s unfortunate news for the White House and Federal Reserve, which are trying to stabilize the economy. . The Fed may have been particularly concerned to see that core inflation – which excludes costs for food and fuel – rose 0.6%. Politicians are watching this measure closely to determine the path inflation could take in the coming months. His renewed concerns accelerated that the Fed would take a more aggressive approach to raising interest rates.

It’s coming out sixth consecutive weekly declinethe S&P 500 is on the verge of a bear market, Wall Street jargon for a drop of 20 percent or more since the index’s last peak. Although the S&P 500 rebounded on Friday, it was still only a handful of percentage points from bear market territory. The Nasdaq Composite, which largely reflects the performance of tech stocks, has been well placed in that territory since early March. This constant slide in the markets shows how gloomy investors have become towards the economy. Concerns about inflation, interest rate hikes and the ongoing pandemic abound and investors can find in every new data point, like last week’s Consumer Price Index Report – another cause for concern and a new reason to sell.