- A lot of entities on Wall Street felt the heat because of their exposure to LUNA.
- Wall Street’s influence on the cryptocurrency market is blamed as the cause of the multi-billion-dollar collapse of the UST Stable coi
- The blame game on Wall Street was simply a knee-jerk reaction
Wall Street’s influence on the cryptocurrency market was blamed as the cause of the multi-billion-dollar collapse of the UST Stable coin.
However, the traders on Wall Street responded with a financial blow that changed the cryptocurrency game despite the critics.
Citadel Securities Hedge fund and Black Rock’s money manager played a flashcard that either had two effects; to tank the market prices even further or to attack the UST and LUNA stable coins indirectly.
Black Rock and Citadel Securities denied allegations by insisting that UST could not be trusted as a trading currency in the financial system.
Just A knee-jerk reaction
Based on a Twitter and Social Media campaign dubbed ‘bad Wall Street guys’, Charles Hoskinson, the Founder of Cardano Blockchain, accelerated the negative ideology on his Twitter feed but later on deleted his Tweet.
According to Lev Mazur, the Founder of Quantfury, the instigated blame game on Wall Street was simply a knee-jerk reaction. He further clarified that a lot of entities on wall street felt the heat because of their exposure to LUNA.
With his financial intelligence and a diversified professional portfolio in trading, mutual funds, and banking, Mazur indicated that cryptocurrencies and crypto-related projects will be exposed to a lot of vulnerabilities.
Cryptocurrencies will have to endure a test run of all manner of financial tensions before the asset class finds its stable position in the financial ecosystem.
Max Liao, an affiliate of Bitman Technologies, the China-based Blockchain-enabled chip manufacturer, said that for LUNA to survive as a global cryptocurrency, risks must be addressed irrespective of whether they were caused by market volatility or Wall Street.
Wall Street Hedge Funds Trading Cryptocurrencies
Reports by the Wall Street Journal earlier this month indicated that Wall Street Hedge funds are already trading cryptocurrencies as mutual funds and pension funds seek to find a way into the market.
In February, Coinbase revealed that its institutional customers traded crypto worth $ 1.14 Trillion in 2021 up from $ 120 Billion in 20202 and with $ 535 Billion courtesy of retail investors.
The CEO of XREX, said that protocol designers and crypto product designers must operate under the notion that any foreseeable weakness in the cryptosystem will eventually be attacked as that is the nature of financial markets.
Huang further insisted that for a new system, more failures are expected as this is an important step in spearheading any form of innovation. According to Analtlfa Technologies’ Liao, the demise of the LUNA will boost the creation of more startups and encourage investors to focus more on risk management through regulation.
Mazur insists that cryptocurrency should not replace Wall Street but it should replace the inefficiencies of Wall Street and the Government.
Despite decentralized finance funds (De-Fi) being very open, most are used for further speculation as traders take advantage of collateral and then use the leverage to buy the same collateral.
About 0.01% of Bitcoin holders control a third of the supply hence small sellers can manipulate it and could manipulate UST. However, this does not change the fact that Blockchain Technology, Distributed Ledger and Cryptocurrencies create the future for a decentralized financial system.
