May 12, 2022 TradeUP Thursday Latest news and bulletin updates
Dow Jones 31,699(-0.46%)
S&P 500 3,903(-0.94%)
(Opening price as of 05/12/2022 compared to last close)
U.S. inflation slowed in Apr, but still higher than expected
Musk faces SEC investigation of Twitter takeover
Coinbase warned its customers could be viewed as general unsecured creditors
The lockup period for Rivian investors expired Sunday
Share Your Thoughts:
Finding value in bitcoin, is now the time to buy the dip?
Bitcoin is off nearly 58% from its November peak. Many crypto holders who bought since last year are sitting on losses.
Meanwhile, bitcoin’s correlation with big tech stocks increases to record. Bitcoin has tended to move in the same direction as the Nasdaq 100 index since the start of the pandemic. Since the beginning of this year, both bitcoin and big tech stocks plunged on concerns about the Fed’s aggressive changes in monetary policy to cool down inflation.
Moreover, a recent crash in crypto is linked to the controversial stablecoin, TerraUSD. TerraUSD, a so-called stablecoin that’s meant to maintain a $1 peg, plunged to as low as 26 cents Wed. Sister token LUNA has lost roughly 96% of its value in the past seven days. Project Terra is buying billions in bitcoin to support its stablecoin, and investors in bitcoin are in panic mode since TerraUSD and LUNA went into free fall.
US Treasury Secretary Yellen pushed for stablecoin regulation, while citing TerraUSD breakdown as risk of financial instability when testified on Tue. After a mass sell-off, Co-founder of TerraUSD, Do Kwon, said that a “recovery plan” was due for release. Things are getting cold in crypto, as investors concerning that bitcoin could be heading for an ice age rather than a “crypto winter”.
What’s your comfort zone for purchasing bitcoin?
Share your thoughts with us for a chance to win a free stock !
#1. U.S. inflation slowed in Apr, but still higher than expected
• U.S. CPI index, core CPI and MoM gains were all accelerated higher than expected. However, inflation has slowed for the first time since Aug. Sector-wise, prices of used cars and apparel decreased in Apr, suggesting a slowdown in U.S. consumption.
• Oil price was still the main drive for U.S. inflation. Oil price was driven by 3 factors: U.S. supply, the Russia-Ukraine war, and increasing demand for travel.
#2. Musk faces SEC investigation of Twitter takeover
• Meanwhile, Musk said he would reverse Twitter’s ban of former President Trump, and Twitter co-founder Jack Dorsey said he agreed. Earlier on Mon, Musk gave his support to a new EU law aimed at protecting social media users from harmful content after he met with an EU official.
• Apollo was reportedly in talks to lead a preferred financing for Musk’s proposed buyout deal. It is reported that funds are being offered a chance to participate in the buyout deal with investments as small as $5m.
#3. Coinbase warned its customers could be viewed as general unsecured creditors
• Coinbase’s filing to SEC included a new risk factor disclosure. Custody coins could be subject to bankruptcy proceedings. By contrast, securities held for customers by a registered brokerage are legally segregated from the assets of the brokerage, meaning they can’t be touched in bankruptcy proceedings.
• Coinbase plunged to record lows as crypto crackdown deepened. The platform held $256bn in cash and cryptocurrencies for its customers at the end of the first quarter.
#4. The lockup period for Rivian investors expired Sunday
• Rivian sank 21% on Mon as Ford sold about 8% of its stake in Rivian at a discount. Rivian was the largest IPO in U.S. last year and now its shares are down 87% from Nov peak.
• Ford owned 11% of the EV startup before the sale, while Amazon has 18% stake in Rivian. Amazon took a $7.6bn loss on its stake in Rivian in its earnings report last month. Amazon shares fell over 14% after its earnings report and led a 4% decline in Nasdaq.
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