This week in coins. Illustration by Mitchell Preffer for Decrypt.
This week’s crypto crash is an ongoing spectacle, with the total market capitalization of all blockchain assets shrinking to about $844.5 billion, a level unseen since the very start of 2021.
Bitcoin plunged well below $20,000, and as of this writing was trading at $19,095—the market leader has shed one-third of its value over the last seven days.
Ethereum is also in the trenches, trading at time of writing for $994.68, a 36% decrease over the week.
Other leading cryptocurrencies that took price hits of 30% or more this week include privacy coin Monero, down nearly 37% to $102.28, Cronos, down 30% to $.10, and Polygon, down 33% to $.36.
Each of the 30 biggest cryptocurrencies, excepting stablecoins, have fallen by double-digit percentages since last Saturday.
Tether is currently trading a little short of its peg at $0.9988.
Antoni Trenchev, the co-founder and managing partner of crypto lending platform Nexo, has likened the current crypto crash to the Panic of 1907—the first global financial crisis of the 20th century, during which wealthy Wall Street institutions were forced to come to the rescue of their struggling peers.
“This reminds me, quite frankly, of the 1907 bank panic where JP Morgan was forced to step in with his own funds and then rally all those guys that were solvent to fix the situation,” Trenchev t...
'Extreme market conditions'
While many crypto skeptics were quick to point out the falling prices, markets everywhere have been sliding.
On Wednesday, the U.S. Federal Reserve announced an interest rate hike of 0.75%—the largest since 1994. When the Fed hikes rates, many investors tend to dump riskier assets, like crypto and tech stocks, girding for a possible recession.
A report from S&P Global Market Intelligence published the same day revealed that FAANG stocks (linked to Facebook, Amazon, Apple, Netflix, and Google), have shed a combined $3.328 trillion this year.
Similarly, a closer look at the blockchain industry’s happenings this week shows things were pretty bleak.
It began Sunday night, when crypto lender Celsius froze all customer withdrawals, swaps, and transfers, citing “extreme market conditions” and liquidity issues. That night, the decentralized finance platform’s native CEL token took a 70% hit in one hour amid a wider market selloff that sank Bitcoin's price to 2020 levels.
Securities regulators in five states have set their sights on crypto lending company Celsius Network over its decision to suspend customer withdrawals this week, according to a report by Reuters.
Joseph Rotunda, Texas State Securities Board director of enforcement, told Reuters that officials in Texas, Alabama, Kentucky, New Jersey, and Washington are making it a “priority” to investigate the crypto lender.
"I am very concerned that clients—including many retail investors—may need to immediately...
Celsius’s decline may have catalyzed the market’s downturn this week because it came just a month after the collapse of another DeFi standard bearer: Terra. To understand how they compare, just look at Celsius’s business model: Celsius offers over 7% returns for locking up stablecoins such as USDC and Tether, and 7.25% for Polygon, 6.25% for Bitcoin, and 6% for Ethereum. The protocol then loans out its pooled tokens at higher rates.
Now, Terra’s dollar-pegged stablecoin, UST, ran to zero last month after its top use case—earning 20% yields on Anchor—was compromised by market uncertainty. A mass exit followed, leading to billions of UST getting burned to mint LUNA at a rate too fast for the pegging algorithm.
While Celsius has not collapsed anywhere near as quickly as Terra, a lot of funds have fled recently: In the first half of 2022, the total amount of digital assets locked on the protocol shrank from around $24 billion to $12 billion.
On Wednesday, embattled Celsius CEO Alex Mashinsky broke a three-day silence to tout the strength of Celsius’s community, but offered no clues as to when users would once again be able to withdraw funds.
@CelsiusNetwork team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.
Illustration by Mitchell Preffer for Decrypt.
Is Bitcoin back? For at least a little while, it feels like it may be.
This time last week, it was trading for $53,229. It’s now trading above $60,000, according to CoinGecko. That’s a 12% rise over seven days, and a threshold unseen since last month.
The price rise came as traders grew more confident that the Fed would slash interest rates by 50 basis points instead of 25. All eyes are on the central bank next week after two years of sky-high inter...
Illustration by Mitchell Preffer for Decrypt.
There's depressing news for those hoping the price of crypto markets would improve this week. Depressing news for nearly all investors, it would seem.
Bitcoin continued to drop, and hard, this week. Over the past seven days, the price of the asset has descended by more than 9% and—after dipping as low as $52,690 on Friday—rolled into the weekend trading hands for $53,229, according to CoinGecko.
That’s significantly lower than its 2021 record of $...
Illustration by Mitchell Preffer for Decrypt.
It was a fairly uneventful week in the crypto world... until Friday.
The action-packed end to the week came with an increase in the price of Bitcoin, buoyed by crypto market optimism after Federal Reserve Chair Jerome Powell gave his strongest signal yet that he will slash interest rates come September.
The price of the asset popped above $64,600, according to CoinGecko, a more than 7% rise over the week. It slid into the weekend at $63,500. Still,...