Nowadays, the cryptocurrency market is in a bear market cycle, and almost all cryptocurrency enthusiasts have suffered a lot in the bear market, from LUNA plummeting to collapse and returning to zero, along with other mainstream currencies and counterfeit currencies in the currency industry. During this period, many positions were gradually sold out, and even some people were disappointed and left the coin circle
Nowadays, the cryptocurrency market is in a bear market cycle, and almost all cryptocurrency enthusiasts have suffered a lot in the bear market, from LUNA plummeting to collapse and returning to zero, along with other mainstream currencies and counterfeit currencies in the currency industry. During this period, many positions were gradually sold out, and even some people were disappointed and left the coin circle.
In the event of LUNA returning to zero, we learned the term "anchoring", which is simply a terrifying existence that can directly make LUNA's billions of assets disappear instantly. However, the LUNA incident has just passed,Another "ETH and STETH anchoring" situation emerged, instantly leading people into that panic state. Big investors began to sell Ethereum on exchanges and decentralized platforms, causing Ethereum to plummet.
Ethereum, as one of the mainstream currencies, is the largest public chain in the encryption industry, known as the king of public chains, the largest ecosystem, and holds a pivotal position in the coin circle. If this' detachment 'really causes Ethereum to thunder, then 90% of the currency in the coin circle will not be completely depleted?
Previously, everyone witnessed LUNA return to zero in three days, and all LUNA tokens were spared. This time, everyone was very panicked. If Ethereum really became the second "LUNA", it was really unimaginable what the current situation of the coin circle would be.
According to relevant analysis, ETH and stETH's detachment was due to a huge deficit in Curve's stETH/ETH pool, which was due to the theft of $70 million by Celsius without being exposed. Later, the company felt that Celsius was not redeemable and became even more anxious to redeem it. The project team locked a large amount of customer funds in stETH, which could not meet users' redemption needs and could only extract liquidity to meet their needs.
This is just one aspect, and there is another reason for the decoupling of STETH. Alameda Capital, as one of the largest holders of STETH, sold all its tokens, indirectly leading to this result.
Of course, some senior coin enthusiasts also believe that the detachment of ETH and STETH will have a certain impact on Ethereum, but like Luna, the death cycle is not enough. It can only be said that the risk is high, but there are also opportunities.
Although there is no direct connection between stETH and ETH prices, stETH is Ethereum 2.0 ETH, which is used as collateral and can borrow more ETH on the Defi platform. If the price continues to fall, the borrowed Ethereum will have the risk of being liquidated. Once liquidated, the holder must sell stETH in the open market, resulting in a greater drop in token prices, which is a huge risk that few people can avoid.
It is precisely because no matter how much stETH falls. After the merger of Ethereum 2.0 takes effect, it can be converted to ETH 1:1. Even if Ethereum plummets, it will not have a dead cycle like Luna. Many people still think this is an opportunity to take a bottom, but now that Ethereum has plummeted, can we take a bottom? No one is certain.
Finally, I would like to advise all investors, especially retail investors and small white investors, not to rush to action. Although there are certain opportunities in this entire event, the risk is even greater. If you are not careful, you will really fall into pieces, and you still need to be careful.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
