‘Crypto winter’ is fading away fortunes and jobs

As if in anticipation, the founder of Tesla and SpaceX, Elon MuskHe tweeted in May 2021: “Cryptocurrency is promising, but please Invest with caution“.

A year later, the cycle of fluctuations in the cryptocurrency markets began, which, having already lasted for more than a month, was marked as a second round of “crypto winter”. This was the name given to the valuation slump cycle that this market experienced between 2018 and mid-2020.

Here we review some of the effects that have been seen as a result of the world The Cryptocurrency Its value has eroded from an all-time high of $3 trillion in November 2021 (trillionsin English (to less than $1 billion)trillionIn English).

Bitcoin, the original cryptocurrency, closed near $21,000 on Friday. This means that it has lost more than 40% so far this year and 70% of its $69,000 cap last November.

For its part, Ethereum closed the week at around $1,100, just 23% from its high of $4,800 in November.

With such trends, fortunes dependent on crypto assets have vanished. By mid-June, the Bloomberg Billionaires Index estimated collective losses at $114 billion.

Cryptocurrency exchange Coinbase has gone from listing on Nasdaq in April 2021 at a valuation of $86 billion to announcing the layoffs of about 1,100 of its 5,000-strong workforce. At the same time, it has reported losses of over 25% in its users. Its stock closed Friday at $62.71. In contrast, 2022 started at $251, after peaking in November 2021 at $357.

Crypto-lending platform Celsius Network has this month suspended all withdrawals and transfers. Celsius has already collected 1.7 million customers who do not know at the time of this post when they will have access to their coins again. In parallel, the Wall Street Journal reported through sources that Celsius hired a consulting firm to explore the bankruptcy file.

In contrast, CoinDesk reports that Goldman Sachs will raise $2,000 million in capital to purchase Celsius’ assets at a discount once the bankruptcy is completed.

Meanwhile, Babylon Finance reported that it had liquidity problems, so it halted transactions such as withdrawals.

Bitcoin miners such as Marathon Digital and Riot Blockchain have sold more assets than they produced in May, according to an Arcade Research report published by the specialist website Decrypt.co.

As for non-fungible tokens (NFTs), where they are called digital art pieces or collectibles, their valuation has been seriously affected.

The extreme example was the first NFT issued by the co-founder of Twitter, Jack Dorsey. NFT, an image of the first tweet posted on that platform, sold for $2.9 million to the businessman Sina Estafi.

The Washington Post reported that when he tried to resell it in April, he asked for $48 million, but was offered only $280, less than 1% of its original price.

generally, The NFT market, presented as the great hope of digital art, fell from $3.9 billion in weekly transactions in February to $964 million in March.According to the same source.

Are cryptocurrencies down? As with investments in bonds, stocks and other financial products, the truth is that no one knows.

However, the economist Peter Schiffwho has always been a public critic of cryptocurrency, has a tip for anyone who would like to consider it on Twitter: “The need to sell bitcoin to pay bills will only get worse as the recession deepens and many scammers (as crypto investors are known) lose their jobs, especially those working for the soon-to-be-cracked blockchain companies.”

“Don’t buy this fall. They will lose a lot of money.”Added Schiff, who leads Euro Pacific Capital from Puerto Rico, where he has lived as an individual investor since 2017.

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