Crypto Market Overview November 7th | Dex-Trade

Chamath Palihapitiya Warns of Catastrophic Fed Tightening

In a recent episode of the All-In Podcast, billionaire Chamath Palihapitiya, who predicted the collapse of world markets a year ago, warned investors that the US Federal Reserve (Fed) is determined to suppress investment demand in an attempt to tame inflation: “[Fed Chair] Powell said he’d rather overcorrect and break things because he has a toolbox to fix the broken bones, but he doesn’t have a toolbox to fix if they undercorrect and they have rampant inflation. Not more explicit you can get. So he’s going to take rates [higher] until demand is destroyed and enough demand is destroyed such that inflation is tamed. But that has huge implications to all of us because we all have to do our job trying to build a company, trying to raise money, trying to invest money.” Last week, the Fed raised interest rates by another 0.75% for the fourth consecutive time, bringing the benchmark federal funds rate to a range of 3.75% to 4%. Investors generally expect interest rates to rise above 4.75% by next year. However, Palihapitiya says investors should now be prepared for a scenario in which the Fed continues to raise interest rates until 2025. As a reminder, high interest rate environments are traditionally bearish for risky assets such as equities and crypto, as it costs much more to invest in debt capital, resulting in returns on USD investments. In such a scenario, the economy is likely to collapse as demand is dampened by the higher cost of borrowing money.

 

Portion of Naivety from Do Kwon: Terra 2.0 and Terra Classic Will Unite?

In one of the WhatsApp conversations recently shared by LUNC DAO, the founder of Terra, Do Kwon, spoke about the possibility of an alliance between the Terra Classic (LUNC) and Terra 2.0 (LUNA) blockchains, and from a technical point of view, it will be quite simple to implement, but for this the Terra Classic community should accept suggestions for software updates. Kwon proposed several combination scenarios in which "whole was greater than the sum of the parts." Some of the proposals made by the developer include upgrading LUNC to parity, forming a cross-network alliance between LUNC and LUNA, rewarding LUNC holders after the crash, and launching LUNA applications on the Terra Classic network. The most "exotic" option, proposed by the internationally wanted Kwon, is to create a single incentive in which LUNA and LUNC holders compete in a head-to-head game. And it’s important to understand that the only person that former Terra fans would like to “compete”with at the moment is most likely Kwon himself. Terra 2.0 is currently being developed by the old Terra team, while Terra Classic is entirely managed by the coin community. However, Kwon's proposals ostensibly should lead to project collaborations to speed up the rebirth of the Terra ecosystem.

 

Dogecoin Won't Become Cardano's Sidechain: Billy Markus Rejects Charles Hoskinson

Dogecoin co-creator Billy Marcus took to Twitter to respond to Cardano founder Charles Hoskinson's suggestion that DOGE could become an ADA sidechain to do more amid the massive events surrounding Elon Musk's Twitter purchase: "Doge isn’t going to use Cardano for anything." And despite the fact that Hoskinson positions his proposal as an "olive branch" of friendship, the co-author of DOGE does not believe in this. Marcus explained that the reason for his skepticism stems from Hoskinson's statements, which describe DOGE as a mockery of his life's work. Recall that the founder of Cardano proposed a cooperation option based on the fact that ADA can help DOGE with scalability and, accordingly, security for possible use on Twitter. But Markus argues that it was dishonest for the head of Cardano to pretend that only speculating with Dogecoin would be risky. Arguing for his reaction, Marcus recalled a period in 2018 when the price of ADA dropped 97% in response to Hoskinson's concerns about increased regulatory oversight should Dogecoin crash after the coin's price reached $1. Even today, this scenario can only be classified as deep crypto-fiction…