 folks and welcome to this special edition of the market report today we're in turmoil folks in the crypto markets what is happening with Luna UST we are here to break it down for you I am joined by our resident experts Marcel Peckman Sam Borgie and Jordan Finnesseth fellows what is going on we have a lot to talk about today give me your gut check gut check right now how are we feeling right now what the heck is going on Marcel we'll start off with you man we're discussing this week everything that is crazy and unexpected is something regular for our crypto users and traders we've been we've seen something similar in 2017 2018 even some stable coins that went bankrupt by then shocked all of the traders but over the past I don't know 18 months we had a relatively quiet period yes a cup of rug pose the the wormhole 900 million dollars missing but other than that it was pretty standard we didn't see a coin going down 80% in one day as we saw today with Luna so yes everybody who has been here for less than 18 months it's probably shocked but for us who have been here since 2016 2017 it's part of the game Bitcoin is not going away Ethereum is not going away because of Luna or because of UST everything is business as usual very interesting seems like that maybe we can return to the whole four-year cycle talk it's not extending to a bull market in this year so like like it's always something that causes the cycle to play out it's never really that predictable back in 2017 it might have been the release of a Bitcoin ETF and they just dumping it on the market whatever but something usually comes along to cause us to happen and here we go it's just like Marcel was saying if you've been around for at least one cycle you're like oh this is crypto yeah so yeah kind of stick with it we're not gonna go away but maybe some pain for a while yeah and obviously the pain is magnified because the market is so much bigger now than it was you know three or four years ago also with respect to something like Luna you have you know the C word which is contagion risk how many organizations how many investors how many users have exposure to Luna as well as to the stable coin UST I think that's where a lot of the issue stem from is the contagion risk the downstream effect of what's happening but I was you know it is still shocking I mean we've all been around the market for a long time it's still shocking to see the third largest stable coin and a top 10 project by market cap bleed this heavily but as as you know no shit coin said you know the market isn't going away anytime soon Bitcoin is here to stay you know we want to just kind of reiterate that it's not the first rodeo that we've all had we've seen a lot of really tumultuous events in crypto but overall the builders are building they have over 30 billion dollars in VC funding just last year alone so these projects are going to get built out and the next cycle will probably reveal new leaders in the space we have a lot to to actually dive into I'm gonna kick it over Marcel we're gonna show charts we're gonna break down what's actually happening some of the theories that you see people talking about on Twitter but Marcel go ahead you're muted I want to remind everyone that even if you got here like six months ago you probably remember the X infinity the running bridge hack which they lost over 600 million dollars on that day the game is still there the the platform is still working yes there was a bug it it was a hack they lost a lot a ton of money but the system still works the users still see some value on that and it's still working it crypto is on under development especially DeFi applications there be there being being built as we use them so yes there will be some mistakes there will be some errors but the system continues this token does not disappear from one day to another even tether the biggest stable coin by market cap back in 2017 2018 there was a day it dropped to 75 cents it's now back to a dollar and working as usual so it's a learning process it's evolving so it's natural to have some mistakes but like I also feel like there is a clear delineation between algorithmic stable coins stable coins backed multi collateral stable coins then you have you know the bonds that are backing you know tether so like each stable coin is kind of different in its own realm I have some conspiracies about that I want to dive into of based on some of these Twitter threads but first if you're tuning in fire away your questions you want to know what's going on we're here to answer all the questions you got today I see a lot of people saying hey degen play am I gonna yolo in you know Tara two bucks or 95 cents whatever we're gonna talk about some of that maybe maybe this could be a good buying opportunity but first things first I want to show this chart because this thing is just an absolute horrific blood scene so Danila if you wouldn't mind just pull it out my screen real quick we'll get into the Luna chart and then we're gonna get into like what actually happened behind the scenes so Danila whenever you are ready we'll get that chart up in the meantime though I do want to kind of like talk about where we were like a couple weeks ago Tara Luna we were in kind of this consolidation phase it was up at 120 then it kind of went down to 90 guys you don't say him why don't you do this can you break it down like what actually happened when it came to like the Tara Luna UST stuff can you kind of give us a skinny sure I so I think what most people have woken up to the past few days was the fact that Tara stablecoin UST lost its dollar peg right so theoretically UST as a as a algorithmic stablecoin is supposed to maintain its peg with the dollar algorithmically in a way that encourages through a system that encourages investors to take advantage of price changes in UST right so there's a burn mechanism involved essentially every time UST is minted an equivalent $1 of Luna is burned and vice versa and when the UST falls below a dollar investors are incentivized to burn UST or remove it from circulation and receive Luna at a discount rate so this is really the system that was in place of the algorithmic stablecoin process it's not like for example Tether which is supposed to have an equivalent backing of US dollars or equivalents in its reserves to issue a Tether token so that's really the difference between you know stablecoins like like Tether and the algorithmic stablecoins which rely on a sister token the case of Luna Tara Luna which is the Luna token so what seemed to have happened is that UST deposits on anchor fell over the weekend they fell I think by over around three billion dollars and of course as we all know UST is overly relying on anchor for demand we've all been attracted to those 20% APUIs and I remember I almost took the plunge on that a few months ago and then all the stuff about Bitcoin reserves started to come into play and talking about Bitcoin we're gonna back it with Bitcoin and that's when the alarm bells went off you know because these two assets have very different risk profile initially I was concerned about the value of the Bitcoin that's gonna be backing this protocol but it turns out it was the pegging mechanism that was the huge issue so UST was then withdrawn from various DeFi platforms most notably from the liquidity pool curve and then Tara or sorry Luna Foundation Guard right you know the nonprofit that does the bidding basically use its Bitcoin reserves to prop up its USD peg that didn't work we wrote about this earlier in the week about 42,500 BTC removed from the LFG wallet as the peg crumbled at that time I didn't want to be too sensationalist and say that they were just gonna offload that BTC but it seems like that's what was that that's what happened so now UST's in free fall and also it's affecting Luna of course you know the sister token so Luna was what for 120 over a hundred bucks as Benton said now it fell below a dollar today absolutely wild and you kind of saw it that screen share we have a lot of people online chirping about what actually happened more so yeah I just want to translate what Sam perfectly described but for the audience that isn't aware of how cryptos work when we say something is decentralized we imagine that there's only algorithms there's a code written that handles the stablecoin so that's what people expect but in true what happens is there's a team of engineers of software coders of developers and in this case the ones team that was handling how much how the money that was back in the stablecoin was used and he one day decided well let's buy a bunch of Bitcoin let's buy a bunch of avalanche to use at backing so it was not really a decentralized project so saying that an algorithm decentralized project failed in this case is incorrect because it was a hundred percent centralized there was a small group of people making the decisions by themselves and when they decided to buy Bitcoin to support the stablecoin and Bitcoin price dropped it was their mistake so it was not really a decentralized project just just a point that I want to highlight four of years that are not so much inside the crypto industry yeah I'm gonna go ahead and pull up this interesting I want to show this Charles Haas post because what he does is he kind of outlines it now I have a little bit of a conspiracy theory of if you're looking back at previous narratives what's been happening I mean we can go through and read this black rock Citadel borrowed 100k BTC from Gemini they swapped 25k of it that BTC into UST this was all done quietly in anticipation of the tax so this was planned it was premeditated when the time was right they called up Doquan at Tehr foundation so they wanted to sell a lot of BTC for UST as a large trade they didn't want to move the market so etc you can kind of like read through this but what I'm gathering from this all is a couple things Doquan got subpoenaed by SEC back in November at main net we all know that Janet Yellen came out on the spot the second the peg was lost from UST yesterday and started clamoring about this narrative of stablecoin regulation we know they've been talking about stablecoin regulation so I am in the camp that the SEC knew and allowed this was gonna happen black rock and Citadel came in did their thing this makes the case for the SEC to come in immediately to do some sort of stablecoin regulation to allow this particular project to fail that's what my expressed opinion is this is all speculation this is not you know this is not facts this is me speculating on what potentially could have happened but it's curious to see what folks in the industry are saying like Charles Hoskinson in other leaders but I'm curious to hear what your thoughts may be because there's a bunch of stuff just happening on Twitter that we can run through as well again somebody the biggest issue here that we really gotta like talk about a discuss is like the idea that crypto messiahs are needed and that we just people just seem to flock to them like they're like they're they're infallible and they're not gonna make any mistakes like right even that what you just showed Doquan they went to Doquan and got 25,000 Bitcoin worth of UST on like on the lowdown because they wanted to kind of orchestrate this thing and he let it happen because he thought that that would help his overall position like this guy if you watch him on Twitter and what he's been saying he's been shitting all over the a lot of the crypto community acting like nothing could ever cause this to happen and it seems like even like regular crypto folks like you know let's take this dude down a peg it doesn't even have to be government conspiracy a lot of other crypto products out there just probably like this dude ain't living up to what we all expect so let's let's take him down a peg and like that chart looks like bit connect 2.0 the difference is that you had big money funds invested in this bit connect whether it's Delphi digital or Raul Paul like there's a contagion spreading across the market and it all goes back to that Doquan and the idea that we need a crypto messiah crypto messiahs are dangerous as we've all seen yeah Marcell go ahead but if we're talking about if it was BlackRock Citadel if it was a government asking the funds to intervene the reason or the actor that did it it's if somebody didn't do it yesterday somebody else would have tried in the next month because they would make the assumption well if Bitcoin drops to $30,000 then Luna's reserves for the stablecoin would drop by 20% so Luna it's it's something that somebody with money and intelligence will eventually got away with that because he'll find the mistake and the mistake was that centralized solution a centralized person or group decided that putting bitcoins and Ethereum's and Luna to as a collateral as margin for a stablecoin would work and in fact we just we've seen that in practice that it simply does not work or at least it requires much more margin so even if Bitcoin drops to $5,000 the stablecoins still survives so it was a basic mistake and somebody found it and exploited it so it could take a month it could take another six months but eventually somebody would have found out and exploited it themselves. It's a great point. I was wondering if you could break down like what is an algorithmic stablecoin because I want to kind of like for folks that are watching who don't know what that is can you kind of break down what is an algorithmic stablecoin and what's maybe the difference between others that are out there. Sure so usually when we talk about stable coins when you think about tether for example or circle what you think of is you know they mint an actual stable token and that token is supposed to be backed by an equivalent reserve either of dollars or dollar equivalents right these could be various other instruments that are you know treasuries etc that's the general scope when it comes to the regular stablecoins that you think about and usually if you're new to crypto you've never been to crypto unless you've gone down the tether rabbit hole we've all done that the tether rabbit hole is a tether fud leads to all this stuff and then you realize that you know what maybe it's not as bad as as as you thought it was the algorithmic stablecoins is basically these tokens don't need that one for one backing per se theoretically an algorithmic stablecoin like Terra for example it maintains its dollar peg through an actual algorithm that encourages investors to take advantage of price changes in this case between UST and the sister token Luna so price changes in UST you know have an equivalent burn mechanism they're depending on how you know the price fluctuates so every time UST is minted in this case an equivalent $1 Luna is burned in vice versa to keep that peg roughly close to a dollar as possible and when UST falls below $1 you know the algorithm incentivizes users traders investors etc to burn UST or remove it from circulation and receive Luna at a discount rate so really this this system relies heavily on the sister token which is you know Luna and that's where a lot of perhaps the regulatory issues might come into play I know we've talked about regulations respect to stablecoins honestly I think stablecoins have done a lot of good if you go to emerging markets for example places where they might not have ready access to dollars maybe through sanctions or whatever it is and they have a crumbling local currency they're using tokens stablecoins issued by tether for example in order to transact to get that stability because when you talk about spending money you tend to want to have some stability on a day-to-day week-to-week basis so the algorithmic stablecoin as you know Marcel rightly mentioned you know we think of it as as there being well there's a there's a there's an algorithm there that's maintaining this whole system but no there's people behind that there's decisions made behind that and the issue that we saw I think reflects that but there's also manipulation as you talked about you know the whole mechanics of the thing the fact that the attackers seem to have accumulated you know over a billion dollars in UST and over the counter markets and then borrowing billions more in BTC than dumping the BTC triggering the fud triggering the sell-off all of that seem to be connected but that's the general difference between the algorithmic stablecoin and the dollar-backed reserve stablecoin that that the two biggest stablecoin issuers you know being circle and being tether operate so I want to let those folks are just tuning in now here's what's happening we're breaking down UST terror what's going on what does this mean for the overall markets we're crawling through the Twitter sphere right now seeing what people are talking about I do want to touch on Doquan strategy for recovery and I also want to point out that I think it's pretty no really bailout we've talked a couple times on pre-show now like hey this could potentially be the 2008 crypto financial crisis yet there's no bailout so we want to talk about doquan for recovery we think it's feasible and then I want to shift over to what is happening what does this mean for the overall markets right now does this mean that we're going to see more consolidation for the days and weeks ahead what we'll start with that one first Jordan what is your take on what does this mean for the overall markets and then we'll shift over into doquan strategy well just looking at the markets right now I think it means that we're in for some more pain because everything's taking their leg down it's like oh yeah this is this is bad this is like the more I look at it I'm like maybe this is the crypto Lehman moment for this cycle I don't know like you're getting people just kind of in fear mode selling off they don't really see what's gonna stop this and the whole fact that Luna and UST are still imploding and it got down below a dollar like yeah Luna got to a dollar before UST did that that shows you how bad that situation got yeah this isn't going to be any time any kind of good for a while just kind of buckle up folks and prepare for pain if you have any free money on the side I'm not saying jump in now because we might have more downside but like start preparing the dollar cost average right there's positive dollar cost average this is a great opportunity for dollar cost averaging the really good projects because we're back in 2020 prices yo so I see Mata has a question why do you think this affects the whole market in general is it just fud or do you think there are more factors Sam or Marcel what are your takes on why do you think this is affecting the whole market well we saw we saw a huge dump on BTC which of course that's gonna affect everything because Bitcoin still exerts a gravitational pull on the broader market you know regardless of you know Bitcoin dominance there's always that gravitational pull also there's the the C word I talked about earlier the contagion risk how many people have exposure to Luna how many people have exposure to the UST and it also has a huge hit on confidence too so these confluence of factors are leading to you know the the downstream effect contagion risk is usually huge in markets because it's rarely an isolated event like we saw back in 2008 just because you know one bank fails you can't just say well that you know the losses are just simply concentrated in that bank no no there's a contagion risk beyond that I think we're seeing that right now anytime Bitcoin dumps in a coordinated fashion like this whether they were trying to burn Doquan or otherwise it's gonna have a significant impact and of course all the on-chain metrics guys you know they couldn't predict any of this you know those guys talking about how exchanges Bitcoin exchange rates are at the lowest level in multiple years so what we saw 85,000 enter literally a couple days ago that can change just like that so on-chain data as far as I can tell has no predictive value from the market perspective so if you want to do on-chain data do it you want to look at it look at it but don't look at it as a predictor of where price could go because it's more noise and it is signal and Marcelle what is your take yeah Benton so I just want to highlight that in this specific case the Luna Foundation Guard so the company the decentralized company that was backing the stablecoin USD decided to buy over 40,000 Bitcoins to back it and once the stablecoin did back it they were forced first to borrow those Bitcoins for the market maker and then they were eventually forced to sell them so causing a market pressure if that hadn't been the case maybe Bitcoin would have suffered less but considering that we had already been on a bear market for the past I don't know six months seven months the investor's mood was already affected so you can check by the futures market premium so how much those traders trading at CME are paying for contracts expiring in June or September so the higher the price they are paying for those future contracts means the more bullish there are and over the past couple of weeks the premium was really small like 2% per year which is nothing they're still not bearish they're still not betting on further downside but the mood the sentiment was not great so when a news such as the Luna breaking the peg and eventually going down 80% and it was a top 20 coin and as we already explained it's part of a bigger DeFi ecosystems most of those balancer compounds and are integrated those pools liquidity pools so one one of them goes down in value it drags down the orders so there's a cascading effect but the system is still working Bitcoin is trading at $30.8,000 nothing really changed on the fundamentals the blocks are still getting produced every 10 months with transactions every 10 minutes with transactions the same for a team so it's more about a momentary panic that will eventually vanish and the money will shift to better stable coins maybe die maker die maybe USD coin USDC but the system continues is still working as designed we have a question from the audience and I'll actually kick this over to Jordan first when do you think recovery would start is it gonna happen in 2022 are we just in it for the long haul for the next Bitcoin having what is your thoughts on that Jordan I remember actually look at that like a couple weeks ago because I'm like oh crap the next Bitcoin having isn't until 2024 and if we're going by this four-year cycle that means we're gonna have some serious pain and this is just like here we go do I think we I think we'll probably hit a bottom this year when I don't know again that's like dollar cost averaging or trying to just average yourself into a market is kind of my approach because I'm not in the business of trying to pick talks or bottom it's a really difficult thing so yeah I think that we'll hit the bottom but I just wanted to like touch back on even the fight around USDT kind of helped facilitate this because even for years everybody's been expecting USDT to be the thing that blew up the market so it kind of encouraged new decentralized stable coins to rise up people kind of got behind Luna because like oh this might actually be something that can replace USDT and here we go blowing up the market because this untested system just came out of nowhere as compared to the USDT threat that's been around since 2017 so like don't we can't ever expect what's gonna happen in this crypto market it's never what we all expect to happen and it's just kind of rolling with the punches and not being overexposed too much but yeah we could we should hit a bottom I think we'll hit a bottom this year but it's gonna be a long road back up after this sim or so what do you guys think are we on a recovery after this or we in this for the long home Sam with your thoughts as I mentioned before I see this was before of the whole terror blow-up I really don't see any pathways for market recovering the next three to six months given the fact that the Fed removed liquidity given the geopolitical factors the macro factors unfortunately crypto isn't immune from macro sentiment especially when we have legacy finance participating in the market and they treat crypto as a risk on asset so if we take a look at cycle theory I mean I know that you know the lead proponent of the lengthening cycle I think Ben Cowan he tweeted I think last week that four-year cycle is extended cycle is dead lengthening cycle theory is dead he said so it actually if you take a look at it it was more or less a perfect four-year cycle in the sense that we had a peak in year three almost exactly year three being last November so what was lacking in this four-year cycle was the blow-off top you know because what we saw back last May and what we saw in November there was no signal for the top per se like there's there was no there was no you know price momentum that would signal that you know where we've reached the top based on previous cycles so no one says we have to have a blow-off top and we didn't really have one this year per se or last year so I think that we haven't bottomed yet will probably be in the process of bottoming the next three months or so and the recovery will will take shape after that whether it's consolidation I do suspect that in the second half of the year the narrative is going to shift from inflation to growth because the Fed is hiking rates into a declining economy that's not going to be good for growth eventually they're going to be forced in my opinion to cut interest rates again and that might actually be a boon for risk on assets so take a look at the Fed take a look at the dollar index and then of course monitor what's happening in the market today to kind of get a sense of where we're going to go but we're probably not going to bottom and in the near term I see it probably the next three months before we were we to the center bottom for the cycle Marcel what are your thoughts here as regards to recovery or are we are we what are we looking at here for the rest of 2022 okay man so you are asking me is a bigger question that lies outside of cryptocurrency for instance if you think that a larger crisis is gonna take place in developed markets like US GDP is going down three or four percent or Europe is entering a grind-out because of the lack of Ukrainian gas and etc if you think that a larger crisis is coming our way it's not about Bitcoin or cryptocurrencies going down it's it's about what can I do with my money so I don't get I don't get liquidated or I don't get my assets go down 50% there's no safe asset because even if you get cash at home if the government springs more money there's more inflation and your purchasing power goes down so there's no safe asset if you think that's a global crisis is about to take place but once you understand the value of the digital scarcity of Bitcoin and cryptocurrencies you're gonna see that eventually it can go down from $50,000 to $20,000 in a crisis but eventually more people will start using it and more people will value this the scarcity and the price will go up to a hundred thousand two hundred thousand dollars if the same thing let's assume I'm very conservative so I'm gonna buy gold so I'm paying $1.9,000 for the Troy ounce right now and the price eventually goes up yes my call was right go is gold is now trading at $4,000 so what's gonna happen every producer in the world every mining company is gonna focus on gold and more gold will be extracted from earth so the gold price will eventually go down back to the two thousand if not two thousand three thousand dollars that cannot happen to Bitcoin and cryptocurrencies if there are more miners trying to produce more Bitcoin the network difficultly goes up so the number of bitcoins produces per day which is 900 bitcoins remains the same and it goes down every four years so even if the crisis go eventually happens and Bitcoin goes down to $20,000 which I think it's really possible the best asset in the world that you can hold is cryptocurrencies because they're scarce yeah it and something I want to kind of like emphasize to from like a macro level do you have a lot of stuff going on right now it you know from the war in Ukraine to China lock down supply chain issues rising energy prices and something Shamath said the other day was like anytime you see energy prices rise 50% typically a recession follows thereafter so we're kind of seeing this play out from the macro level but this could be kind of like the domino that cascades into like a lot of air other areas inside of crypto which I find it really fascinating but the one thing I do want to talk about right now is dough quans strategy or plan like is Luna dead is it is there a chance for recovery so Danil if you want to my poll on my screen I want to run through this this quick Twitter thread and for those of you that are just joining us we're running through tear Luna what the hell happened and this is kind of dough quans Twitter that they put out yesterday I believe so the price stabilization mechanism is absorbing USD supply over 10% of the total supply but the cost of absorbing so much stable coins at the time has stretched out the on-chain swaps read 40% and Luna prices diminished dramatically so he's kind of breaking things down what he proposes is that the Luna you know community had proposed this 1164 proposal to increase the base pool from 50 million to 100 million SDR this in theory he is saying should increase the minting capacity so with all of this kind of being said is there a path to recovery for terror Luna what are your thoughts here are you even considering maybe buying this as a potential prospect to recover even the half of what it was Jordan we'll start this off with you first oh I think the trust that Luna did have might be destroyed that's the biggest thing like rebuilding trust is a really difficult challenge even if they could get the logistics of it worked out how many people are gonna want to trust the Luna ecosystem I'd rather go over maybe if I'm gonna go experimental I'd probably pick something like Fract Share just because they're not getting too high on the horse and they're kind of keeping their own pace and developing in a rate that I think is more acceptable yeah I don't I'm not too keen to jump into Luna if I'm I'm not even feeling like trying to play the trade and catch it on the bottom trade it when it goes up any of that stuff but I don't like to really get involved with things that are collapsing like that and it's just an energy thing for me I don't think that the trust that I don't think crypto people are gonna trust it all that much after this Sam is there any hope for Luna I mean stranger things have happened and in the crypto market you know if Luna is able to recover it's interesting that they're not getting a bailout it seems you know because they do have a lot of heavy backers right but they're not getting the bailout which leads me to believe that there is concern about the overall trust of the actual ecosystem as Jordan mentioned okay we can maybe backstop you and bail you out but if trust moving forward is lost it's not just some hack but when there's a case of a hack you can patch that up you can work through that it might not necessarily destroy the trust of the platform but I think what this is what this has done it's really shine the spotlight on the issue of algorithmic stablecoins right because there's really no formula there's no algorithmic stablecoin that can predict everything that's gonna happen so I think that's really where the issue is I mean can it recover I suppose in terms of buying Luna at two bucks whatever it is now you got to look at it from a risk reward perspective it might not be bad as a risk reward trade to get it in at two dollars and then ride it up later on but you know don't don't hang your whole portfolio on that is what I would say and Marcel what do you think any hope for Luna first because what Sam said trust when you build a system like that you need trust on the issue and it has been lost the guy has been shifting what he's saying now there's news coming out that he was the creator of the basis stablecoin that failed in the past so considering that are other options out there that seem better and more respectable I don't think there's a chance for the Luna to rebuild itself yeah I'm I'm also kind of in that same party I you know when you look at iron finance other hacks pancake bunny swap on BSC these these like kind of big-name projects in those ecosystems just never came back and I think you're right I think what it does come down to is trust because once you have this giant ecosystem and a lot of people you know we'll we'll kind of look at this and say hey I you know I got I got earned on this once I don't want to get burned on it twice by the way we have a poll live right now tell us what you think you think Luna's done you think it's got a chance to recover if so all those DJs out there maybe you're getting in this thing right now hoping for a quick three or four X we'll see what is gonna happen do you think there will be a bailout with Luna like it will companies come to defend that and if so why would they do that Jordan what do you think another aspect of like we'll come back is dope on himself like he's not making any friends in the crypto industry like he's not being any kind of humble even now that he's been kicked off the mountain toppings like down in the valley he's still like I'm gonna kill die no like people do not respect that people respect people like the talak beater in who are kind of like more soft-spoken and can really oh yeah admit to mistakes and stuff like I don't think he's probably one of the biggest hindrance to the fact that it's long-term success because people are really turned off by his personality where's Elon Musk at get Elon Musk bailout say why would why would they not get bailed out and you're saying what is that 100% trust I I think I mean look I think that I forget which hack was it was it the Ronin hack that resulted in the backers coming in and stepping up and yeah providing backing I think it was don't quote me on that but with this whole as well I think yeah yeah that's right so but with this it's like their backers I mean these VC funds that are backing I've been writing about it for over a year they have a lot of money they're flush with cash I think they could step in financially and do it but you also want assurances you want to be able to back a project that is going to have long-term viability that can get over the hump can it get it over the hump it could I think it could but the issue would be the trust factor there's a significant hindrance now to allowing the Terra Luna ecosystem to rebuild to what it was that issue could be trust that issue could be the underlying issue with the stable coin mechanism with the algorithmic stable coin mechanism it could be an issue with dole quantum self as Jordan mentioned he's not really winning any favors in the community right now you know shitting on people still after you literally created a stable coin that has destroying the market in a sense so that's kind of where I think the reluctance might be and the you know the support you know the recovery plan that he announced I'm not sure if that's actually going to address any of the issues to be honest yeah it's so I'd see I know he has a good point here he says nobody will bail out most of the VCs have lost money common people VCs will deploy the money on new stable coin projects it almost makes sense that if your VC do you want to dump you know potentially partnering with other VCs to back this one billion dollar loss you know is that better is that capital better deployed on new projects that maybe could make you know 2x that it's I guess it's an interesting position from where the VCs sit I guess we're we have this poll open right now it's good Jordan I was gonna say like we're not like a we're not an island to ourselves crypto is in the little player in this big world of events going on like you mentioned earlier war it can we're just in all like all these cycles like you hundred year cycles are coming to a head right now and the whole world's going through this transformation even just the whole thing of going from web 2 to web 3 shows that we're under in the midst of this huge transformation and I've never seen any big transformation that didn't include turmoil as we we as even Marcel mentioned if somebody didn't do this yesterday somebody would have figured out what happens with UST in a month or two but I'm gonna go on say there was always gonna be something that tank this whole market because the stock market's tanking we're not completely devour uncorrelated with that so all this is happening in a big stew of like clusterfuck and we're just trying to like stay above keep our heads above water but there's no simple solutions there's war going on in the world there's famine there's collapsing yields there's we can't people can't plant in their farms like this there's so many things that are distracting people from crypto that this is this yeah this is a global contagion of so many different events that we all just need to kind of buckle down and realize that we're kind of having a fractal of the 20s eight 1920s now started with a pandemic heading into economic collapse and all the stuff so there's just a lot going on realize it's not all just about crypto but like we're in for some struggles over the next decade Marcelo go ahead well something that worries me is whenever I hear that somebody is depositing stable coins or whatever coins at a youth farm or defy application and said well it's risk-free and I get my more coins by the end of the day even if it's rapid Bitcoin whatever there's always a risk involved what is the main benefit of cryptocurrencies self custody I can check right now how many bitcoins are in circulation I can check how many light coins are in circulation and I can check my balance instantaneously just with a simple computer I don't need to be a miner I don't need heavy equipment to do that and once you hand out your coins to an application decentralized or centralized you give up on that so the benefits of self custody just disappear you're not able to check if those coins are already available to you yes you can check yet the address of avi has 200,000 Ethereum and maybe 10,000 of that it's not belongs to me or 10 coins belong to me but you cannot instantly verify and check yes I can withdraw those coins from this service it's not like that so you give up on a large benefit so there's always a risk involved when you get ill there's no free lunch never is we got 41% of the people saying that Luna will recover coming up next closely is 40% actually now it's tied 40% 40% neck and neck here a lot of people are torn the ball we talked about and what are we doing in times like these you know so for those that are just tuning in we're breaking down what's going on with Terra Luna UST we appreciate everybody that has been tuning in today to get some of the hottest information on what's going on we've been crawling Twitter seeing what people are talking about if you have questions drop them in the chat but what are y'all doing right now are you sitting in seeing you know if we go lower how are you all approaching this from a potential investment slash trading opportunity Jordan you want to kick us off I'm just kind of observing I'm waiting for the dust to settle I'm not even I'm not deploying any I haven't been to I haven't deployed any capital that I've earned from working especially all year long and that just seems like it's going to be the case for a while because I'm going to wait for this to sell down and I think all like hope is a big thing for people and I think that all these people that want me to come back or hoping that it comes back because it's going to be a rough road if it doesn't and that means that the bear market that we're going to face is going to be a little bit longer so yeah I hope that it comes back quick but I don't see as Sam mentioned I don't there's not any good factors out there they're saying yeah macro return bull market let's go nope it's looking pretty grim out there Sam what are you doing so never sell a capitulation event I think you know if most investors realized that they wouldn't get wiped out I'm not in a position to sell any kind of capitulation so I'm removing that off the table and I'm still confident that I hold high quality assets that are going to be very beneficial to my portfolio over time so I'm content with my positioning as Jordan mentioned I don't really have any pension right now to be scooping up any projects because you know friends don't let friends buy altcoins in a capitulation market you know so let's not catch following knives guys right so I have no intent of doing any of that once I get a sense of a bottom and there's no perfect way to pick bottom I'm not trying to pick a perfect bottom but when I get a sense that we're in this we're beginning to stabilize in a lower range I could start considering adding position sizes with respect to Bitcoin I have a DCA general DCA strategy that's as incrementally to my holdings despite the fact that I'm fully allocated as a purely capital perspective but it's nice to be able to DCA on a monthly average as well beyond that I'm not really doing anything fancy I'm not trying to get cute here very good insights Marcel what are you doing in times like these well I deployed some capital to buy some leverage position in Bitcoin but nothing significant below $30,000 but I still believe that we're gonna see lower levels if a global crisis develops that being said if you have enough money I beg you to diversify even if you are fully bought on Amazon on Google stocks diversify buy a little bit of Bitcoin by the bit of Ethereum by the bit of real States or gold or whatever so the more diversified you are the less the lesser the odds of your portfolio going down 50% in a week yes it can still happen but the odds are smaller so diversify by buying different assets not only Bitcoin Luna avalanche and Ethereum not only cryptocurrencies if you have enough money buy some real state buy some stocks so get out of the risk because there's lots of uncertainty going on especially with cryptocurrency because of regulation as well those professional investors will not put a lot of money until they're clear what the regulation is saying what is approved what should be why is the ETF not being approved so once they have the rules set even the rules are really strict they can they can decide okay I understand the risks I know what is a security token what is not a utility token I know I can buy this this coin and this coin I should not buy a repo because of the SAC dispute so once the rules are clear even if they're really strict it's better for professional investors to get in the market but for right now I suggest you diversify yeah my recommendation is McDonald's is always hiring so you know fill out your applications folks I mean I've consolidated my portfolio I had exposure to Luna I am now a long-term bag holder so I have no other choice but to hope for the best here so it happens people got burned in this whole thing it's sad to see hopefully there's some sort of recovery plan we're gonna find out in the days ahead this is one of the hottest stories that we're gonna be following here on coin telegraph but any closing thoughts before we wrap things up today and I just want to appreciate everybody that tuned in and fired away your questions to get the scoop on what's happening with Terry and Luna in UST let's see so Jordan closing thoughts for today show the most lesson I learned back in 2017 or 2018 is the best way to make money in crypto I mean the run-ups are really fine but the best way to make money in crypto is to work in crypto which is why I work in crypto now like that's still my play I enjoy it I would encourage people to close their block folios go outside like this is this could last a while six months to a year their markets aren't fun don't make it all about crypto as Marseille Marcel said like diversify crypto but diversify your your thought your mental space out of just focusing on cryptos go outside enjoy the Sun enjoy some nature try and find talk to your friends talk to your family do something exciting way from crypto because it's showing and I get much better anytime soon so you might as well find something to enjoy amen Sam cozy thoughts yeah take solace in the fact that we're all screwed and by all of us that means stockholders the bond markets everything is screwed right now I mean the NASDAQ is down 25% this year the S&P 500 is down I think what 15 16% you know gold which is proven to be the ultimate shit coin is still below 1900 imagine that you know if you held if you've been holding gold for over a decade you've made no money whatsoever everything is down right now right the bond market is a complete it's in complete chaos so that's the macro factor that we're considering right now there's really no safe place oh you want to hold cash great well it's being inflated away for consumer goods at 8.5% on the asset side probably double that so again we're all screwed we're all in this together but this shit this too shall pass hold decent assets hold high quality assets and the fantasies about the Lambo and stuff put that away and actually be productive in life as Jord mentioned you know you want to be in crypto working crypto you know be productive and you'll be fine in the long run all right Marcel my message is in the end it won't matter if you paid $60,000 or $30,000 either the crypto Bitcoin and crypto will succeed and this will be the one of the scarcer assets in the world value that a million two million dollars in ten years or we're gonna fail miserably so that don't don't spend so much time thinking well I could have paid $29,500 I'm paying $35,000 it's not gonna make any difference in the end if you can start get your money every month and DCA by a little bit every month if you are already all in just forget about it don't over trade because the prices went down the lesser you trade the better great advice from all three experts here today on the marker for I will leave you with this get ready folks batten down the hatches it's gonna be okay you're gonna be thankful that you went through this painful time because in a year from now two years from now adoption is gonna happen things are gonna get to a better spot this is just one of those events that we've seen March 2020 black swan event everyone thought the sky was falling now you'll remember May 11th as the day of infamy for crypto for 2022 we will be fine there is light at the end of the tunnel we will continue to forge ahead as an industry and I'm super excited but there's gonna take some patience like Jordan said like Sam said there's gonna be some pain to endure Marcel even said as well again thank you all for tuning in today for this special edition of the market report we're bringing you the facts and we're bringing you some of the news you can't find anywhere else we appreciate everyone that tuned in today loved having everyone chime in on chat make sure you're here on Tuesday 12 p.m. Eastern we're here like and subscribe coin telegraph on YouTube until next time folks we will see you over and out