Crypto warning from within: Billionaire says more bad news ahead
The list of injuries is growing by the day.
The crypto market has lost more than $ 2.1 trillion since its peak in November, according to data from CoinGecko.
Bitcoin, the most popular digital currency, is down 71% to $ 20,086.93 from the November 10 record of $ 69,044.77. Ether, the Ethereum platform token and the second largest cryptocurrency in terms of market value, are down 76.8% to $ 1,129.75 from the highest level in November of $ 4,878.26.
In addition to cryptocurrencies, companies have also weakened. Lender Celsius Network has been silent after suspending fund withdrawals and all other operations on the platform. Visitors and customers are no longer greeted with a message asking them to be patient.
The sister tokens Luna and UST, or TerraUSD, from the Terra ecosystem have collapsed, causing the disappearance of at least $ 55 billion. The Singapore-based crypto hedge fund Three Arrows Capital (3AC) has just defaulted on a loan worth more than $ 670 million, after it had $ 200 million exposure to Luna.
“The Terra-Luna situation took us very seriously,” 3AC co-founder Kyle Davies said.
Voyager Digital and the company BlockFi, which lent large sums of money to 3AC, had to go to the quantitative trading company Alameda Ventures for a rescue operation to avoid panic.
Voyager Digital (VYGVF) – Get Voyager Digital Ltd report “has access to $ 75 million of the credit limit made available by Alameda and can continue to use the Alameda facilities to facilitate customer orders and withdrawals, as needed,” the company said.
Some exchanges “are already insolvent”
Alameda is owned by the young cryptocurrency billionaire Sam Bankman-Fried, CEO and founder of the cryptocurrency exchange FTX.com.
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Bankman-Fried comes with more bad news. According to the billionaire, who has become the “savior” of the crypto industry in spite of himself, many projects and protocols are already insolvent. He therefore warns that we may witness a cascade of bad announcements, but does not give names.
“There are some third-tier stock exchanges that are already secretly insolvent,” Bankman-Fried told Forbes.
The young entrepreneur recently bought a 7.6% stake in RobinHood (HOOD) – Get Robinhood Markets Inc. report, who are in serious financial difficulties. Rumors surfaced on June 27 that Bankman-Fried could take over the entire brokerage house.
But in the interview with Forbes, the young entrepreneur denies all active merger talks with Robinhood.
There are currently just over 500 cryptocurrency exchanges. We obviously know the most popular ones like Binance, Coinbase (COIN) – Get Coinbase Global Inc ReportGemini, Kraken, OKX, KuCoin, Crypto.com, FTX.com.
But there are also obscure platforms such as BTCC, CoinBene, BTC Exchange or C-CEX that have not registered the volume of exchanges during the last 24 hours.
It goes without saying that if big names like RobinHood are in trouble, lesser known stock exchanges will have to suffer more.
In addition to RobinHood, many crypto companies, and more specifically stock exchanges, have recently announced cost-cutting measures to deal with the crash in cryptocurrency prices and the uncertainty associated with the macroeconomic environment.
Coinbase has cut 18% of the workforce and withdrawn employment offers for new employees. Crypto.com, Gemini, Bitso, Buenbit, BlockFi and Bitpanda, a stock exchange backed by billionaire Peter Thiel, have also announced layoffs.
“We have always known that crypto would be volatile, but that volatility along with major economic factors can test the company, and us personally, in new ways. If we are flexible and resilient, and stay focused in the long run, Coinbase will come out stronger “on the other hand,” said LJ Brock, chief of staff, in a June 2 blog post.
