Cryptocurrency markets continue to live in flux as Bitcoin hits $20,000, Celsius bankruptcy looms

Despite rising only marginally after yesterday’s Federal Reserve rate hike of 75 points, cryptocurrencies are once again feeling pressure from a myriad of factors, including destabilized markets, fears of an impending recession, the previous depeg of TerraUSD and the slow collapse of Celsius.

As of this writing, Bitcoin price sits at $20,891, a whopping 7.41% drop in the last 24 hours. Ethereum also fell around 11.35% and is now at $1,096, a record drop from a price of $4,426 set in November 2021 of Ethereum’s all-time high. Ethereum Classic isn’t faring well either, down 4.9% for the day at a price of $15.40 and is down 71.92% year-on-year.

Smaller, lesser-known cryptos are also feeling the chill of the crypto winter, best expressed via Polygon, which is currently trading at a low of 0.39 cents, down 73.87% for the year. Solana ($30.84), Dogecoin ($0.05) and Avalanche ($16.17) are all in the red, recording price drops of 2.3%, 4.79% and 5.04% respectively .

These continued pressures swirling around crypto news lately are largely due to the heightened panic associated with the Fed’s interest rate hike yesterday, affecting not only securities and digital assets, but everything from mortgages. to air fares. Beyond that, Bitcoin and Ethereum both determine the values ​​of several cryptocurrencies in the market, which means that many other assorted risky assets are tied to the highest prices, making any decline an event on the downside. market scale.

Related article: Crypto Lender Celsius Halts Withdrawals and Transfers Amid Market Crash

Additionally, recent events surrounding cryptocurrency lending platform Celsius have caused major fears within the market, heightened by the previous disaster known as TerraUSD. Acting as a sort of digital asset bank, which was posting impeccable gains of around 18.6% per year, Celsius had no sooner started to lose ground in the current climate of fear.

In October 2021, Celsius Network CEO Alex Mashinsky pointed out that the lending platform’s total assets amounted to $25 billion, more than enough capital to meet both lenders and borrowers for all their DeFi needs. Last month, according to Celsius’s website, its assets stood at $11.82 billion. Riddled with poor crypto investments and massive withdrawals, Celsius was hit with a rather bleak future, forcing the firm to halt all withdrawals and transfers on Monday, June 13, citing the need to “stabilize liquidity.” This very decision is currently under investigation by various securities regulators from New Jersey to Texas.

TerraUSD, the algorithmic stablecoin attached to its sister coin Luna, set the crypto markets on fire several months ago, costing the industry a recorded loss of $400 billion. Fears still reign supreme after the demise of stablecoins, and yet a new entity has risen from the ashes of TerraUSD, called Luna 2.0, which has had its own mess of failures since its launch.

According to cryptocurrency research firm Kaiko, Celsius has few options to climb out of the gutter. Conor Ryder, the crypto analyst under Kaiko, relayed these sentiments in the firm’s official report released on Wednesday, June 15.

“Even if they survive this onslaught, I don’t see how anyone can trust Celsius to protect their assets in the future. Perhaps in a few years we will see this as a watershed moment for the adoption of decentralized finance. , but that’s probably just the optimist in me.”

Read also : Bill Gates Throws Shade at Crypto and NFT, Saying “They’re ‘100% Based on Superior Fool Theory’

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