Crypto News, May 10: Bitcoin Carnage Continues as MicroStrategy Reaches a Grim Milestone

CoinMarketCap's homepage right now is flooded with red numbers. Losses everywhere.

Just a few weeks ago, some influencers on Crypto Twitter were declaring that a huge BTC breakout was just around the corner. Through whizzy charts and endless emojis, they will have injected many rookie investors with a false sense of confidence.

Take everything you see on Crypto Twitter with a liberal pinch of salt. Avoid chasing losses, and only invest what you can afford to lose. Remember: these pundits will have no idea about your financial circumstances.

Bitcoin dipped to lows of $29,944.80 in the early hours of Tuesday. At the time of writing, it has bounced back — reaching $32,500 hours later. We could see further, painful tests of $30,000 in the coming days, especially if Wall Street continues to tumble. Stock market futures were in positive territory as of Tuesday morning. Monday's stock market slide left the S&P 500 at its weakest level since March 2021 — and there seems to be no end in sight. Gloom may be further exacerbated when Coinbase steps up to deliver its first-quarter financial results later on Tuesday.

TerraUSD has lost its $1 peg — plunging to lows of $0.68 at one point. While UST is starting to head upwards, it's far from stable right now. The algorithmic stablecoin has been thrown into chaos — and billions of dollars worth of Bitcoin held as collateral is now being liquidated, adding to selling pressure. There's a bigger problem on the horizon. LUNA, another altcoin in the Terra ecosystem, has plunged by more than 50% in a little under eight hours. In normal times, traders are meant to be able to swap their UST stablecoins for LUNA. But this crash has meant UST now has a bigger market cap than LUNA, creating a real risk of a bank run.

At one point, MicroStrategy was sitting on billions of dollars in paper profits. But now, all of this has evaporated — leaving Michael Saylor in a potentially precarious position. MicroStrategy owns 129,218 BTC — and on average, the business intelligence firm has paid $30,700 for each of these coins. Bitcoin's dip to $29,944 meant that, for the first time since its acquisition spree began in August 2020, the company's entire BTC holding was underwater. MicroStrategy's share price plunged by 24% on Monday — and Saylor is attempting to put a brave face on things by dusting off an old meme of him working at a McDonald's.

El Salvador may be in a state of emergency right now, but it seems Nayib Bukele is still keeping a close eye on Bitcoin's price. On Twitter, the president confirmed that the Central American nation has just purchased an additional 500 BTC at an average price of $30,744 per coin. Overall, that's worth more than $15 million — and it comes as the country's other BTC investments remain deeply in the red. As Bitcoin's price recovered on Tuesday, Bukele tweeted: "I could sell these coins right now and make almost a million dollars in just 11 hours, but of course not."

Mark Zuckerberg has confirmed that non-fungible tokens are going to start being tested on Instagram this week. In a new video, Meta's CEO also revealed that "similar functionality is coming to Facebook soon" too. This is an especially significant development — not least because Facebook had an estimated 2.91 billion monthly active users as of January 2022. Zuckerberg also revealed that he wants to focus on "3D NFTs" — with collectors getting the chance to use augmented reality to project digital art onto physical spaces.