Crypto Winter Has Arrived! Why Are Cryptocurrency Investors Leaking? – Tech Tribune France

Cryptocurrency markets are under pressure. On Wednesday, June 15, the market capitalization of cryptocurrencies fell below $1 trillion, from over $3 trillion in November 2021. As crypto market volatility escalates and investors continue to get rid of risky assets, the future of ostensibly decentralized currencies looks uncertain at best.

  • Bitcoin and other cryptocurrencies fell after $12 billion lender Celsius Network halted customer withdrawals
  • Layoffs at cryptocurrency companies like Coinbase, Gemini and BlockFi after weeks of falling coin prices
  • Crypto investors fear that the Federal Reserve’s monetary tightening will deplete market liquidity, which will increase the volatility of the downtrend

why is it important

The current crypto crisis differs from that of 2018. At the time, the value of Bitcoin fell by 80%. However, he recovered and reached new heights. This time, however, the credibility of cryptocurrencies in the market is under threat. Likewise, he shows no signs of rebirth. Brian Armstrong, CEO of Coinbase, expects “another crypto winter”.


Why do cryptos crash?

The show started two weeks ago when stablecoin TerraUSD, Luna’s sister currency, lost its peg to the US dollar. Luna is algorithmically linked to TerraUSD. After the collapse of TerraUSD, Luna all but disappeared. In a few days, its value went from 20 billion dollars to almost nothing. This resulted in a trail of victimized investors.

Crypto GFX 2

On Tuesday, Coinbase said the cryptocurrency exchange will cut about 1,100 positions, or 18% of its employees. Additionally, organizations such as BlockFi and have reportedly cut hundreds of positions.

“Layoffs are starting to happen at pure crypto companies like Coinbase, Gemini, and BlockFi, but larger institutional and investment groups like Fidelity continue to expand their crypto operations with a long-term view that will last for years. ”, Dr. Sharma says further.

The Cryptomarket in India

Ajeet Khurana, the founder of Reflexical, a cryptocurrency advisory firm, noted that due to the limited scale of crypto markets, a small change in liquidity has a significant impact on price. He said: “During the time of Covid-19, increased liquidity drove the market up eight times, and now reduced liquidity has driven it down.”

In addition to market factors, India has additional hurdles. Khurana told India Today that the country is “also suffering from the liquidity crisis, but has the added challenge of negative regulation, as well as the imposition of TDS which drains the investable capital from the trader and reduces market depth. . I see the market remaining sluggish for a few more quarters, although there will be intermittent spikes. »

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Crypto Winter Has Arrived! Why Are Cryptocurrency Investors Leaking? – Tech Tribune France

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