Bitcoin prices have fallen below $ 17,800 as sales increase

Celsius effectively locked its $ 12 billion crypto assets under management, raising concerns about the platform’s solution. The news flooded the crypto industry, reminiscent of what happened in May, when the failed US dollar-pegged Stablecoin project lost $ 60 billion and pulled the broader crypto industry.

Celsius is known for offering up to 18.63% yield on their deposits. This is like a product offered by a bank that excludes any regulatory safeguards.

That extraordinarily high yield was finally under scrutiny.

“This risk obviously seems to be just the beginning,” said John Todaro, Needham’s vice president of crypto assets and blockchain research.

Todoro continued, “What I’m saying is on the decentralized side – a lot of these defi protocols, most of those positions are based on them, so you don’t see a lot of underfunding that can happen with centralized lenders and lenders.

Crypto markets appeared to stabilize on Tuesday, with Bitcoin hovering around $ 22,000 and ether at about $ 1,100.

Investors were assessing Celsius’s decline and, meanwhile, another crypto firm joined a growing list of companies cutting staff to try to increase profits.

“We have a recent inflation report that I think has surprised many,” explained Emily Choi, president and chief executive officer.

“We have Jamie Dimon and others to talk about the upcoming economic storm, and if we look at what’s happening in the economy, it’s the most sensible thing to do right now,” Choi continued.

Crypto companies across the board are looking for ways to cut costs, as investors turn away from risky assets, pulling trading volumes.

MicroStrategy used the company’s debt to buy bitcoin, and in March, when Sailor borrowed $ 205 million to use its bitcoin as collateral, it decided to take another step toward normalizing bitcoin-backed finance – and then to buy more cryptocurrency.

“We have $ 5 billion in collateral. We’ve borrowed $ 200 million. So I’m not going to let people go out and take out more leveraged loans. Saylor said Crypto Minor Marathon Digital also took a credit line with Silvergate Bank.

As bitcoin prices plummeted this week, investors worried that the company would ask for more collateral for its debt, but Sailor said the fears were extreme.

“The margin call hasn’t sounded much of anything,” Sailor told CNBC earlier this week. “It’s Twitter famous to me, so I appreciate it. I think we have a fortress balance sheet. We’re comfortable and the margin debt is well managed.”

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

Crypto prices initially rallied on the news that investors hoped we could avoid a recession, but that rally was short-lived.

We returned to red on Thursday. Bitcoin fell to about $ 20,000, at prices not seen since the end of 2020.

The losses were closely related to sales on Wall Street, in which the Dow fell 700 points to less than a year.

Investors seem to be unable to shake off fears of recession, and some say cryptocurrencies can take time to recover from a sale in risky assets.

“I think we’ve taken the elevator down, and I think we, as an industry, need to get back up the stairs and build a real utility,” he said.

In many ways, what we are seeing is a “healthy wash,” Gunter said.

“As a builder, a long-term investor … I don’t want to be in a market driven by speculative, short-term pricing, let’s be honest, the crypto market has been around for two years,” Gunter continued.

Bitcoin and Ether continue their sales in a quick clip on Saturday afternoon, showing no signs of slowing carnage in the crypto markets.

This comes as crypto hedge funds and businesses face growing questions about bankruptcy.

“In some ways, this is just an old story. You are under-lending and in the long-run. And I think it’s really unfortunate that people are losing money, and in some ways, I think it takes the space back, because you lose some early adopters or some newcomers.” Cascarilla continued.

But Cascarilla says investors are still looking for quality crypto investments.

“The basic technology here and the adoption lines we see, the coming agencies, how you can implement your finances at the speed of the Internet, are the things that need to happen,” he said.