Crypto bros down bad
Crypto is at an all time low. (Photo: The Motley Fool)
Crypto bros are not having a good time lately as the cryptocurrency market is currently experiencing its massive flop era.
As of this writing, Bitcoin, one of the most famous cryptocurrencies right now, has currently dipped by 7.8% to $20,289. The lowest price it’s been at since December 2020. It has lost more than half of its value this year which is nearly a 70% drop from its sky high record of 69,000 (nice) from last November 2021. Ether, the second largest token, fell as much as 12% to $1,045, a new 15-month low.
The one to blame? Our favorite word for the year: inflation! The May US consumer price index (CPI) report last Friday was not a pretty sight as it tells of yet another 8.6% increase.
This freaked a popular crypto lending company called Celsius (CEL) out to the point that it paused customer withdrawals. As a result, everyone else freaked out.
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.” Celsius said in a statement last Sunday.
Winter is here
Coming into 2022, investors haven’t exactly been adventurous when it comes to the places they’re putting their money in. Alex Reffett, co-founder of wealth management firm East Paces Group said that “Collectively, investors have shown more interest in value-based investments and less in speculative stocks and alternative ‘store of value’ investments.”.
The Federal Reserve has raised its interest rates multiple times already this year which causes more unrest in the marketspace. To be fair to them, the Fed is trying to fight back against a historic surge in inflation—the biggest we’ve had in decades. And if you’ve been reading from us in a while, you’d know it’s something we just don’t shut up about.
The higher the Fed raises its interest rates, the less people are more willing to bet on unpredictable and volatile ventures—which is exactly what cryptocurrencies are.
Key players in the industry are calling it the “crypto winter”. To avoid being frozen up in all of it, investors are trying to save themselves.
Coinbase, an American cryptocurrency exchange platform, is laying off 1,100 of its workers in order to save the company from completely collapsing. CEO Brian Armstrong said in an email that “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Gemini, another U.S. exchange, said it would cut 10% of its employees this month.
Three Arrows Capital, a crypto hedge fund, is in a very rough state after being liquidated by its investors. Anonymous sources have claimed that the company owed at least $400 million. To which Zu Shu, the firm’s co-founder confirmed in a tweet that they’re doing everything they can to fix whatever mess they’re in.
It has gotten so bad that even Bill Gates himself has joined in the discussion to roast the entire crypto and NFT community mocking the latter down to just a bunch of “Expensive digital images of monkeys” that will “improve the world immensely,”.
If you’re someone who is currently delving into the crypto space (or at least planning to), now might be the best time to rethink your life choices.
