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What Happened On Black Wednesday?

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What Happened On Black Wednesday?

How nothing caused the crypto markets to crash

Fabian Klauder
May 21, 2021
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What Happened On Black Wednesday?

newsletter.defitimes.io

Hey DEFI TIMES community,

On Wednesday, Bitcoin fell from $43,000 to almost $30,000 - a drop of 30% in a single day!

The last time we saw such a significant drop was March 2020; however, this time we have ten times the market capitalization than in 2020.

People were scared!

Source: Fear & Greed Index (https://alternative.me/crypto/fear-and-greed-index/)

But what actually happened on Wednesday? Well, two news stories came together that accelerated the crash: Elon & China FUD!

Elon Musk put out several Bitcoin-critic tweets over the last days - people were speculating that Tesla sold all their BTC. Long story short, it was only speculation; Tesla didn’t sell!

What was the China news story about?

China banned cryptocurrency services for institutions in 2013 and 2017. And now, these regulators reiterated their stance on banning crypto services for institutions. Therefore, nothing changed in China. It was just a repetition of the regulation a few years ago. Sadly, the market totally misinterpreted this news story. The markets thought that the regulations were new!

Both the Elon & China FUD lead to the crypto markets taking a deep dive on Wednesday!

Whenever such a flash crash occurs, you should ask yourself: Did anything change?

In this case, nothing really changed. Tesla still owns its BTC and China imposed no new regulations.

The drop might have been totally… irrational!

And it may only be a matter of time until the markets come to realize it.


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AAVE Pro

Twitter avatar for @StaniKulechov
stani.eth 👻 =(⬤_⬤)= 👻 @StaniKulechov
Aave Pro for institutions
Image
8:32 PM ∙ May 17, 2021
2,182Likes383Retweets

Aave CEO Stani Kulechov teased Aave Pro, which will be only for institutions. At first, it will be permissioned but other features will remain permissionless.

Elon FUD

Twitter avatar for @elonmusk
Elon Musk @elonmusk
@ChainLinkGod @PeterMcCormack Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies. A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?
fortune.comHow much Bitcoin comes from dirty coal? A flooded mine in China just spotlighted the issue – FortuneThe recent accident showed just how fragile, and how environmentally damaging, the Bitcoin supply chain can be.
6:17 PM ∙ May 16, 2021
41,247Likes7,846Retweets

Elon put out a number of Bitcoin-critic tweets during the week. This lead to speculations that Tesla sold their BTC. THe markets took a deep dive on Wednesday.

Rest assured! Tesla has Diamond hands!

Twitter avatar for @elonmusk
Elon Musk @elonmusk
Tesla has 💎 🙌
2:42 PM ∙ May 19, 2021
449,958Likes58,407Retweets

Visor Finance

Twitter avatar for @VisorFinance
Visor Finance @VisorFinance
Visor’s Active Liquidity Management Beta Launch on Uniswap v3 is now live!
visorfinance.medium.comVisor’s Active Liquidity Management Beta Launch on Uniswap v3Today marks the day Visor Finance initially begins active liquidity management on Uniswap v3. We are excited that the core pillars of Visor Finance are going live: On the day of the Uniswap v3…
5:21 PM ∙ May 17, 2021
183Likes75Retweets

Visor is a protocol to actively manage Uniswap V3 positions. They just launched their Beta; it's worth reading!

China crypto ban

Twitter avatar for @decryptmedia
Decrypt @decryptmedia
Chinese Payments Associations Back China's Crypto Ban in Latest Warning ►decrypt.co/71255/chinese-…
Image
3:25 PM ∙ May 18, 2021
14Likes3Retweets

The China FUD is back! Chinese authorities reiterated previous crypto bans for institutions. It’s not new though!

Sake launch

Twitter avatar for @0xSAKE
SAKΞ 清酒 @0xSAKE
SAKΞ is the first product available on @SushiSwap's MISO token launchpad platform. Only 888 bottles of #SAKΞ will ever exist. instantmiso.sushi.com
Image
5:59 AM ∙ May 18, 2021
349Likes59Retweets

Sushiswap recently announced their new token launch platform “Miso.” Sake is the first project to launch there!


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DISCLAIMER: All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.

Do your own research before you purchase cryptocurrencies. Any cryptocurrency can go down in value. Holding cryptocurrencies is risky.


Some recent tweets

Twitter avatar for @jurimaibaum
jurimaibaum.eth | 🌔 @jurimaibaum
We are still alive 🔥🙏🏼
Image
7:34 AM ∙ May 20, 2021
7Likes2Retweets
Twitter avatar for @defitimes
DEFI TIMES @defitimes
The next few months are going to be crypto ______.
4:04 PM ∙ May 20, 2021
2Likes1Retweet
Twitter avatar for @defitimes
DEFI TIMES @defitimes
June 17 is the deadline for the VanEck Bitcoin ETF decision Mark the data in your calendar Things are about to get crazy! 🚀
8:44 AM ∙ May 21, 2021
8Likes1Retweet

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What Happened On Black Wednesday?

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