Voyager Digital was sued for bankruptcy this week and has become the latest victim of a bear market that continues to stray from the path of destroying the digital currency segment.
the ears of the shrinking earth and the best inflation in more than 40 years ended the downturn in the nascent cryptocurrency market this year — releasing a strong crypto winter that forced high-flying businesses to bankrupt and drive things. investing in panic trading. The turmoil previously cost trillions of dollars in market capital, billions of dollars in dry funds and thousands of jobs, but the deaths now only signal the beginning of the crisis. why not.
“Someone is coming forward with a problem – I don’t think it will end here,” Marcus Sotiriou, an analyst at London digital asset brokerage GlobalBlock, said. Forbeswith a view to the proximity of a dozen-me businesses Peter Thiel supported Vuld– face the unforeseen consequences after locking customers out of their money or starting repair procedures last month. “It’s going to be a constant period of pain,” he said.
One wonders if the crypto bear market will compete later in the years to come winter crypto of 2014 and 2018 — the latter wiping 80% from the bitcoin price following there are hundreds of new signs. Sotiriou believes this low could be lowered to 12 months if the increase does not continue, allowing the Federal Reserve to ease interest rate hikes to reduce risk assets. to publishers. Analysts no therefore it is sure to come.
“This is necessary for any financial market to mature and evolve,” argues Matteo Dante Perruccio, a partner at crypto investment Wave Finance who expects to take cryptocurrency prices in about six months — to two years — ago of return, as. past rounds. “But now, there’s a difference,” he added, pointing to the wave of industrial finance – from the likes of Tesla, Goldman Sachs, Morgan Stanley and more – that has encourages greater use during illness: “We’re coming back in. an appreciative market, to continue and improve, with less thought and experimentation and sincerity. of the economy.
Crypto publishers are waiting for better days ahead, Forbes It looks at all the deadlines from the latest crypto winter, including unlocking, rising prices and selling records – as well as life lines and cryptocurrencies. customers can help protect the fence. Unfortunately, now:
Trillions were wiped out of wealth
Low cryptocurrency prices and government stimulus measures boosted cryptocurrency prices during the crisis, but the Federal Reserve’s decision to prevent further inflation by rising the interest rate has since disappeared in the minds of investors – embodying one of the biggest losses of the crypto market in history. After amassing a net worth of over $ 3 trillion in November 2021, the cryptocurrency market posted its worst first half and fell to about $ 950 billion, a nearly 60% drop this year, according to and CoinGecko.
Continuing the bearish sentiment, Terra’s top token, a top -tier cryptocurrency worth more than $ 40 billion, lost all of its assets in a week in May after its sister TerraUSD, a stablecoin. expected to hold a price tag of $ 1, broke his money peg. markets fall. Currently, the high -end cryptocurrencies bitcoin, ether and BNB have fallen 70%, 75% and 65% from high levels. It took the market years to return similar losses: When the crypto winter hardened beginning in 2017, there were more than 1,000 days for the largest cryptocurrency. the world to get to a new height.
Thousands were destroyed
Before the market slowed, cryptocurrency companies laid off more than 2,000 employees in less than five weeks. So far, popular brokerage Coinbase laid off 1,180 employees, or 18% of its workforce, on June 14 — weeks after billionaire CEO Brian Armstrong taught investors can lead a long -term bear market. crypto currency. In a letter announcing the layoffs, Armstrong said he was planning “for disaster” and noted “rapid growth” during the sick beef market. “It’s amazing, and it’s challenging,” one former employee wrote on LinkedIn. Others have described the cut as “short” or “short.”
Also in June, Gemini, the switch initiated by billionaire twins Winklevii, which is said to cut about 10% of its 1,000 employees, included changes. Crypto.com and BlockFi said they would lay off 5% and 20% of their workforce, about 260 and 170 employees, respectively. Since then, the Celsius threshold has been reported to be 150 employees, and Austrian retailer Bitpanda has cut 270 jobs, calling the move “necessary… To drive the storm and exit. out of financial health. “
Investors have accumulated cryptocurrency funds at a rapid pace as bitcoin fell to an 18 -month low last month. A total of $ 423 million came out in the week of June 17, wiping out all flows this year and ending the first record of $ 198 million since January, according to crypto asset management firm CoinShares. The turmoil pushed assets under the management of crypto banking products to a record-low $ 21.6 billion last month, down 37% from May, according to the “liquidation threat. “caused” panic “among investors after the fall of Luna, CryptoCompare wrote in a statement. Meanwhile, Bank of America reports that the number of its customers using the cryptocurrency has fallen by more than 50% to less than 500,000 since the market’s peak in November.
The bullish crypto stocks need to count with the changing market. On Tuesday, top miner Core Scientific reported that it sold most of its bitcoin portfolio at an average price of $ 23,000 last month, raising more than $ 167 million. In a statement, CEO Mike Levitt said the sale was a “serious crisis” led by weak markets, high prices and “historical inflation.” Canada-based Bitfarms, which made headlines in January by partnering with Tesla and former billionaire Michael Saylor’s MicroStrategy in buying bitcoin for its balance sheet, also sued a large number of , threw in 3,000 bitcoins, or half of his pile, for $ 62 million at the end of the month.
“It’s a common practice for bitcoin miners to sell during the last period of the bear market,” explains Sotiriou, noting that some companies may need to save money to cover costs or expenses. keeping up with the increase in high prices.
Million In Real Money
Announcing “critical market conditions,” crypto lender Celsius became the first major platform to suspend withdrawals and transfers between customer accounts on June 13. Within days, others followed: Babel Finance, CoinFLEX and Voyager were all released. No one can re -enter, so they spend billions of dollars that their investors can’t afford.
“They’re in a critical position because they’re wrong about the customers’ money, they’re lost and they can’t pay their customers back – and there’s no guarantee that they’ll pay the money back, “said Sotiriou. In its most recent quarterly report, Coinbase warned the public about the crisis, treating customers as “non -creditors,” or creditors with the lack of pressure to fall behind, when the company goes bankrupt.
Property and Property
Only a handful of crypto businesses are failing. On June 27, Voyager issued a lawsuit suing the crypto bank against Singapore’s Three Arrows Capital (3AC) for failing to pay payments on $ 675 million in bitcoin loans. and stablecoin. 3AC held about $ 3 billion, but Singapore financial regulators criticized the company late last month, saying it had given false information and gained power. to drive up to $ 250 million. On top of that, 3AC’s problems were exacerbated by the result of the sale of its troubled investors, which reportedly had overleveraged bets placed on the Grayscale Bitcoin Trust and over $ 200 million in Investments. zero. On Friday, a British court in the Virgin Islands announced that it had ordered 3AC to terminate its assets, arguing that detention would not be allowed; it was left for bankrupt the same day.
With the outcome of 3AC recorded, Voyager set himself up for bankruptcy on Wednesday — five days after the release of the commercial. “While I strongly believe in the future, the long -term volatility and contagion in the crypto markets will require us to make thoughtful and decision -making actions now,” said Voyager CEO. Stephen Ehrlich in a speech. In filing in court, the company found it owed more than 100,000 and up to $ 10 billion in assets. Vauld and Celsius have also announced that they are looking at new management options.
Life lines and artillery
Some crypto companies hope to be rescued before being forced to close their doors in search of partners. On Friday, FTX, the exchange founded by billionaire Sam Bankman-Fried, entered into an agreement to sell the embattled BlockFi for a total of $ 240 million. “You know, we want to do a bad job here, if that’s what we need to organize things and protect customers,” he said. Forbes last month after providing BlockFi and Voyager with $ 750 million in credit lines between FTX and its quantitative trading company Alameda. Today, FTX says it has “a few more billion” to help hard -earned businesses.
Now, Goldman Sachs is seen raising $ 2 billion to help buy distressed assets from Celsius, and other real estate companies are showing interest. “I get this kind of deafness if you think the causes of the long -term case are really strong, when everyone else is diving, that’s the time to double down,” said Fidelity CEO Abby Johnson, who oversaw this year. Industry-first decision to allow bitcoin 401 (k) transactions, said last month when asked about what could be its third crypto currency. “That’s the right thing to do.”
“It’s a great encouragement,” Dante Perrucio said. “The big companies that are looking for critical crypto assets are the expectation that the industry is coming back – and coming back strong – even though this is a very difficult time for all of us.”
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