The value of bitcoin falls below $ 17,800 as sales accelerate

Celsius has effectively blocked its crypto assets for $ 12 billion under management, raising concerns about the platform’s solvency. The news flew around the crypto industry, recalling some of what happened in May, when a failed stalkcoin project pegged to the US dollar lost $ 60 billion in value and led to a widespread crypto industry.

Celsius was known for offering users a yield of up to 18.63% on their deposits. It’s like a product that a bank can offer except for the lack of regulatory guarantees.

These insanely high yields were something that eventually came under close scrutiny.

“This risk, of course, seems like it’s just the beginning,” said John Todara, Needham’s vice president of crypto-assets and blockchain research.

“I would say that on the decentralized side – many of these DeFi protocols, many of these positions are too secured, so you should not see a situation of underfunding that can happen to centralized borrowers and lenders. , you could still see a lot of liquidations with this pledge sold out under DeFi protocols, ”Todara continued.

Crypto markets seemed to stabilize on Tuesday, with bitcoin hovering around $ 22,000 and airing around $ 1,100.

Investors were estimating the Celsius temperature drop, and meanwhile another crypto firm has joined a growing list of companies that are cutting staff to try to make a profit.

“We had a recent report on inflation that I think surprised many people,” explained President and Chief Operating Officer Emily Choi.

“We have Jamie Diamond and others talking about a future economic hurricane, and so given what’s happening in the economy, it seems like it’s the smartest thing right now,” Choi continued.

Crypto companies around the world are looking for ways to cut costs as investors emerge from the riskiest assets by reducing trading volumes.

MicroStrategy used the company’s debt to buy bitcoins, and in March Sailor decided to take another step toward normalizing Bitcoin-funded funding by borrowing $ 205 million using his bitcoin as collateral – to then buy more cryptocurrencies.

“We have $ 5 billion in collateral. We’ve borrowed $ 200 million. So I’m not telling people to go out and take out a high-credit loan. I believe I’m doing my best to become a leader and normalize the situation.” the bitcoin-funded industry, ”said Sailor, who added that public crypto miner Marathon Digital also took a credit line at Silvergate Bank.

As bitcoin prices fell this week, investors worried the company would be asked to provide more collateral on the loan, but Sailor said fears were exaggerated.

“The margin call is a lot of noise,” Sailor told CNBC earlier this week. “It just made me famous on Twitter, so I appreciate it … We feel we have a fortress balance, we’re comfortable, and the margin loan is well managed.”

Then on Wednesday afternoon, the Federal Reserve raised key interest rates by three-quarters of a percentage point in the most aggressive increase since 1994. The Fed said the move was made in an attempt to curb sky-high inflation.

Cryptocurrency prices initially rose on this news as investors hoped we could avoid a recession, but this rally was short-lived.

On Thursday we were in the red again. Bitcoin has fallen to about $ 20,000, to prices it has not seen since late 2020.

The losses were closely linked to a sell-off on Wall Street, during which the Dow fell 700 points to its lowest level in more than a year.

It seems that investors cannot get rid of the fear of a recession, and some say it may take time for cryptocurrencies to recover after the sale of riskier assets.

“I think we’ve lowered the elevator, and I think we as an industry are going to have to climb the stairs back and go up by building real utilities,” she said.

Gunther said that in many ways what we see is “healthy leaching.”

“Someone does not want, as a builder, as an investor in the long run … to be in a market where they are driven only by short-term price action, speculation as, let’s be honest, the crypto market has been mostly for the last couple of years,” Gunther continued. .

The crypto market slaughterhouse shows no signs of slowing as bitcoin and ether continue to sell out quickly on Saturday afternoon.

This is happening when crypto hedge funds and businesses are facing growing insolvency issues.

“In a way it’s just an old story. You take short loans and borrow long ones. I think it’s unfortunate that people lost money, and I think it’s in a sense cut space because you lose some first users or some people who have just come into space, ”Cascaril continued.

But Cascarilla also says investors are still looking for quality cryptocurrencies.

“The fundamental technology and the acceptance curve that we see, what institutions are coming, how you can make your financial system work with the speed of the Internet, these are things that need to happen,” he said.