May 18th, 2022
Last week, “crypto crash” fears dominated the news. From the undoing of UST and LUNA (which created aftershocks throughout the entire cryptocurrency market) to the revelation that Coinbase users could lose their assets if the company went under, it was a high-stress week for crypto investors. It wasn’t all bad news, though, as Fidelity announced a new crypto ETF (and a metaverse ETF too). We break down these stories and more in our latest weekly news roundup.
What Everyone’s Been Buzzing About
Terra & LUNA crashed…and nearly took Bitcoin down with them: When the algorithmic stablecoin Terra (UST) lost its peg to the US dollar last week, its sister coin LUNA quickly began to crash as well. In a last-ditch effort to quell the tide, the Luna Foundation Guard said that it liquidated near $3 billion of Bitcoin from its reserves. The move didn’t work — Terra and Luna are both essentially worthless now and have been de-listed by multiple exchanges — but it did cause Bitcoin’s price to plunge. Bitcoin has since stabilized, but it’s still lost about 50% of its value since November 2021.
Coinbase says users could lose assets if it goes bankrupt: In an SEC filing, Coinbase revealed that its customers’ assets could be seized from creditors in the event that it had to file for bankruptcy. Coinbase says that it’s in no danger of going bankrupt. But the revelation still spooked investors and caused the stock to nosedive. Coinbase has now fallen approximately 80% since its IPO last April.
New Fidelity ETFs will focus on crypto and the metaverse: Just weeks after Fidelity revealed that it would offer Bitcoin inside some of its 401(k)s, it announced the two new thematic ETFs: the Fidelity Crypto Industry and Digital Payments ETF (FDIG), the Fidelity Metaverse ETF (FMET). Both funds will launch on April 19th. Fidelity’s recent moves indicate that the mega-broker aims to lead the way in providing access to emerging market investments. Read our full review of Fidelity here >>>
Your Netflix show will begin after this…ad? Last month, Netflix stock shares tanked after the company announced its first subscriber reduction in 10 years. But Netflix is still king in the streaming space and it may soon woo price-sensitive consumers by offering its first-ever ad-supported tier. In a recent note to employees, executives said that ads could be coming as soon as the final quarter of 2022. Investors seem to like the news — the stock is up more than 8% over the past 5 days.
Elon Musk threatens to pull out of Twitter deal: Another week, another round of Musk/Twitter takeover drama. Last Thursday, Musk tweeted that his deal with Twitter was “on hold” until he could confirm that fake/spam accounts did indeed make up less than 5% of users. Later, he revealed that Twitter’s bot check only included 100 accounts and (even later) that their legal team had called to inform him that he had violated their NDA by making that information public. Virtually every time Musk tweets, Twitter’s stock either crashes or surges. Risk-averse investors should stay away.
What To Keep Your Eye on This Week
Home sales numbers: The next seven days will provide some sought-after insight into the current state of the real estate market. Existing Home Sales for April will be reported on Thursday while New Homes Sales numbers will be released next Tuesday. Both numbers were down in March and inventory increased slightly. A continuation of those trends would be good news for would-be homebuyers who are dying for the market to settle down.
Retailer earnings reports: The financial performance of retail sector companies is often considered to be a solid gauge for the health of the overall economy. With that in mind, analysts will be anxiously following the earnings reports of several major retailers this week including: Walmart (WT), Target (TGT) Lowe’s (LOW), and Home Depot (HD).
Here are three featured stories from around the web that our team found interesting:
- For Tens of Millions of Americans, the Good Times Are Right Now (New York Times)
- The Crypto Crash Is Just the Start (The Atlantic)
- Why the Biden Administration’s Plan to Fix Gas Prices Isn’t Working (Wall Street Journal)
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