In the world of cryptocurrencies, symbolic figures are of great importance. Hence, the fact that Bitcoin fell to $ 20,000 this weekend is fuel for the panic the sector is experiencing. That means it lost all the value it achieved in 2021 when it exploded in popularity and price, prompting millions of people to invest in crypto assets.
Bitcoin reached $ 17,592 in the early hours of Saturday, recovered $ 20,000 on Sunday and fell again on Monday morning. The cryptocurrency flagship has lost 70% of its maximum value, 55% since the beginning of 2022. By June, it had already left more than a third of its price, in the middle of a “crypto winter” leaving Coralito, to stop. On Remuneration and Dismissal.
That same Monday, the Celsius Trading Platform announced that the funds withdrawal blockade would not be lifted in the short term. Its users have been frozen for a week. “Our goal remains to stabilize our liquidity and operations,” the company said in a statement, adding that it expects to no longer answer customer questions about the situation as it has in the past. “We are in an open dialogue with the regulators to find a solution.
The platform stands at Celsius following the dismissal of almost all major cryptocurrency trading platforms. One of the most prominent, Coinbase, laid off 18% of its employees after announcing earlier this year that it would hire 2,000 people. Twins, Winklevoss twins from crypto-millionaires; o Crypto.com, which has made huge investments in sports sponsorship, has also announced that just a few hundred workers will be laid off.
Earthquakes spread throughout the crypto network. Starting with those who carry currency in the system, miners have closed their crypto farms to investors who were waiting to make a profit and are now on the brink of collapse. This is the case with the Three Arrows Fund, which considers a survival requirement from other investors. The Terra / Luna currency collapse “warned” them. Admits Their managers.
“Many projects will fall apart,” explains Javier Pastor, Bit2me’s spokesman, the largest cryptocurrency exchange platform in Spain and the first to be recognized by the Bank of Spain for elDiario.es. “These are cycles that clean up all the projects that are not useful, they also remove a lot of people from the market who do not understand this asset. “I think this is positive in the long run, but people who bought Bitcoin for $ 50,000 or $ 60,000 probably do not agree with me,” he added.
Pastor insists that Bit2me does not run the risk of being caught up in international panic. “We have a very healthy treasury and we are actually continuing to hire people,” he said. “Many people think that volatility is bad for exchanges, but it actually leads to more trading,” he said.
The sector defines its current crisis as a “cryptocurrency”. Heavy and continuous fall, but temporary: After weeks or months of red numbers, spring comes and assets rise again. This is what happened in 2018 and hopefully in 2022 the same thing will happen and not a structural change. The question is how hard this new winter will be, how many companies will fall on the road and how many investors will lose everything in the general context of decapitalizing the economy, the stock market crash and inflation.
There are currently more than 20,000 crypto assets listed on trading platforms. If their value fluctuates overnight, as was the case with Terra / Luna, situations such as Celsius Square or the edge of the abyss, such as three arrows, can multiply. The Terra blast took in about $ 30 billion from about 600,000 investors. Prior to the Celsius blockade, it held about 12,000 million euros.
Noteworthy is the capital flight from the crypto market. According to Coinmarketcap, total crypto asset capitalization fell below $ 900 billion this Monday. In December 2021 it was three billion.
“In 2021, we saw this situation because it was a monetary issue that we have not seen in many years,” he said. “This liquidity has shifted to various crypto assets as well as the stock market. Now that the party is over, this flow of liquidity seems to have stopped and it is clear that people who were just speculating are leaving the market.”
The Spanish firm’s analysis is shared by other international analysts. “The market may have been a bit dependent on ‘cheap money’ and that market prices were high,” said Simon Peters, an eToro spokesman.
As always, Bitcoin sets the general trend. “We expect the crypto asset markets to adjust to the effectiveness of Bitcoin,” Peters said. “History suggests that we may see further declines, especially if macroeconomic resistance shows no signs of slowing down.”
Of course, from there to the end of cryptocurrencies there is a stretch. “Despite the large decline in the crypto asset space, it is important to note that development, use cases, and industry regulation continue despite sales,” Peters said.
Source: El Diario