This week was easily the industry’s worst in 2022: Prices dropped across all sectors, with all major projects sinking by double-digit percentages over seven days.
Market leaders Bitcoin and Ethereum hit lows not seen since 2020, when the cryptocurrency’s total market cap briefly bottomed out at $845 billion, more than two-thirds below an all-time high. $3 trillion seen in November. At the time of writing, that’s about $859 billion, a 1.85% recovery in the last 24 hours.
There were more than just prices to shout about, though. On Crypto Twitter, many were discussing Celsius’ decision to freeze all loot last Sunday. That night, the decentralized financial platform’s native CEL token took a 70% hit in one hour, evoking fears that the entire industry was in jeopardy. After all, it was only last month that Terra collapsed.
Wu explained how Celsius’ insolvency was linked to the company’s decision to use custodial funds to buy many ETH Estacada de Lido (stETH), a cryptocurrency allegedly pegged to Ethererum but which has been trading noticeably below its parity for the past week. Lido’s stETH is also not currently redeemable for Ethereum, but it will be when the network eventually transitions to proof-of-stake later this year.
At one point in Wu’s thread, he called Celsius’ business strategy a “delicious plate of degenerate delicacies.”
So, let’s plate this delicious dish of degenerate delicacies:
1) Celsius opened a lot of loans 2) They took deposits from users and exchanged them for $stETH 3) They now owe a lot of money and don’t have the reserves to pay them back
Bloomberg Podcaster Joe Weisenthal highlighted a tweet from Celsius CEO Alex Mashinsky just 27 hours before the company halted withdrawals. “Why spread FUD” indeed.
Twitter had not heard from Mashinsky for three days after the freeze, but when he returned, he sent a message of support to the Celsius team and community. But no word on restarting withdrawals.
@CelsiusNetwork team is working non-stop. We are focused on your concerns and grateful to have heard from so many. Seeing you all come together is a clear sign that our community is the strongest in the world. This is a difficult time; your patience and support mean the world to us.
Another event reminiscent of Earth’s historic collapse last week was Tron’s USDD stablecoin. depeg in progress. On Monday, CEO Justin Sun said he was using $2 billion of TRON’s reserves to protect against short sellers as the company’s other token, TRX, also went down in value.
Sun was aware that the situation looked like a scene-by-scene rewrite of Earth’s catastrophe, because at one point, his tweet echoed one of the Do Kwon.
Despite some similarities to Terra, TRON has yet to collapse. USDD is still selling below 95 cents, but TRX is up 3.5% in the last 24 hours and while it has lost almost 20% of its market cap in the last seven days, it still had a better week in terms of price. than Bitcoin and Ethereum.
‘The other 99%’
On Wednesday morning, Kraken CEO Jesse Powell fired off an 11-tweet thread describing his commitment to promoting a cryptocurrency culture on the exchange while announcing that Kraken would continue to hire “and I hope to do a better job of filtering early.” Powell also mentioned that the company had a small number of mutineers.
1/ We have recently tried to summarize what @krakenfx culture has been for the past 11 years, and what we hope it will continue to be.
We had some heated debates and it turns out that we have about 20 people out of 3200 that are not fully on board. 👇🧵https://t.co/Ht6bagQ6T1
As the discussion unfolded, Powell accused the 20 “awake activists” of undermining productivity. He also defended the Kraken’s diversity.
6/ We have people in over 70 countries, speaking over 50 languages in the company, trying to build products for people in 190. Different perspectives will be shared. This is DIVERSITY. It’s not always easy. You need to be resilient, humble, open and highly tolerant of different norms.
“We will never ask our employees to adopt any specific political ideology as a requirement for our workplace,” the company wrote in a statement. blog post published that day. “That said, we ask that our employees respect the individual rights, privacy and freedoms of others. Crypto is a freedom movement and Kraken will continue to be a freedom company.”
Elon Musk, dogecoin-loving Tesla CEO, was approved.
An empty quiver?
Another potential industry time bomb that dominated the Twitter conversation this week was Singapore-based cryptocurrency hedge fund Three Arrows Capital. insolvency rumors.
On Tuesday, a cryptocurrency trader passing by moon lord shared a screenshot from blockchain data platform Nansen showing that wallets associated with Three Arrows Capital were linked to five of the biggest transactions last week. He claimed that 3AC had sold at least 30,000 stETH (see above) and accused 3AC founders Zhu Su and Kyle Davies of deceiving the public.
people think Celsius is the biggest stETH dumper but it’s 3AC and it’s not relatively close, they’re dumping it into every seed round bill and address they have, most look like it’s going to pay outstanding debts and loans they have pic.twitter.com/9bZnmTXQzj
On Friday, Davies also broke the silence, telling the Wall Street Journal that 3AC has engaged legal and financial advisors “to help find a solution for its investors and creditors”. Davies also mentioned several other options, including the sale of assets or a rescue package from another company. Davies said the company hopes to buy more time by negotiating an interim agreement with existing creditors.
Finally, economist Peter Schiff tweeted on Saturday that while he believes the cryptocurrency will survive, Bitcoin “will not be a part of it.”
A lot of people in #crypto industry are saying this crash is a healthy shakeup. I agree that it is healthy, but not for cryptocurrencies. This industry as we know it is dead, which is very healthy for the economy. Crypto probably has a future, but #Bitcoin will not be part of it.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.