An advertisement for Bitcoin, one of the cryptocurrencies, is placed on a building in Hong Kong on November 18, 2021. The price of Bitcoin and other cryptocurrencies fell on Monday, June 13, 2022, as major crypto lender Celsius halted all withdrawals. Citing “extreme market conditions”. This is the second collapse of any part of the crypto world in the last two months. (AP Photo/Qin Cheung, File)
NEW YORK (AP) – The price of bitcoin and other cryptocurrencies fell Monday after a major cryptocurrency lender failed to halt all withdrawals from its platform, citing “extreme market conditions.”
This is the latest high-profile collapse of a pillar of the cryptocurrency industry. These recessions have wiped out billions of dollars in investor wealth and prompted urgent calls for regulation of the freelance industry.
Bitcoin was trading at around $22,400 late Monday, down more than 16% from the previous day. Ethereum, another widely used cryptocurrency, lost about 17%. Investors are selling riskier assets like digital currencies and tech stocks as the Federal Reserve has hiked interest rates to combat high inflation.
On Sunday, cryptocurrency lending platform Celsius Network announced that it was halting all withdrawals and inter-account transfers to “comply with withdrawal commitments over time.” With nearly 1.7 million customers and over $10 billion in assets, Celsius didn’t specify in its announcement when it would give users access to its funds.
In exchange for customer deposits, the company pays extremely generous returns of up to 19% on some accounts. Celsius takes those deposits and lends them out to earn returns.
Lending platforms like Celsius have come under scrutiny lately for offering yields that normal markets cannot support, and critics have effectively dubbed them Ponzi schemes.
Francisco Orduna, 36, said he was relegated to Celsius about a year ago and was drawn to the company’s promise of higher returns on its crypto holdings.
“The risk was easy to miss as users got used to those weekly interest payments from Celsius,” Orduna said. He pulled most of his money out of Celsius late last week but said he still has the remnants stuck on the platform.
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This is the second notable collapse in the crypto universe in less than two months. Stablecoin Terra exploded in early May, wiping out tens of billions of dollars in a matter of hours. Stablecoins are considered relatively safe as they are believed to be backed by hard assets such as currency or gold.
Like Terra, Celsius had sold itself as a safe place for cryptocurrency holders to deposit their funds. Even as Celsius failed, the company’s website advertised that users could “use their coins whenever they want and keep them safe forever.”
“There is still a lot of work to do as we consider various options, this process will take time and may be delayed,” Celsius said in a statement.
The move surprised investors and depositors. In an online chat, he asked why his investments were not protected.
Orduna said he withdrew his money in part because of Terra’s outbreak of Celsius. There were reports that Celsius had invested some of its users’ funds in Terra, and there were concerns that Celsius was taking too much risk with depositors’ funds.
“I started to worry if the products on offer were really sustainable,” he said.
It’s not clear if Celsius depositors will get all their money back. A cryptocurrency lender is not regulated like a bank, so there is no deposit insurance and no legal framework to get your money back first, such as a bank. B. in the event of bankruptcy. It’s possible that Celsius investors, including the Quebec Pension Fund and major venture capital fund WestCap, will recoup their investments sooner than Celsius depositors would like.
Westcap did not respond to a request for comment. The Pension Board of Canada also did not respond to a request for comment.
“That was another bank run. You’re not doing anything new here. You’ve advertised your services as a better savings account, but you end up being just another unsecured lender,” Corey Klipston, CEO of Swan Bitcoin, who has been publicly skeptical of Celsius’s business model for years.
Terra and its token Luna offered similar returns on customer deposits. These tokens collapsed after a large number of customer withdrawals forced Terra’s operators to liquidate all assets used to hedge their currencies. The collapse of Terra has sparked calls for reform from the cryptocurrency industry and demands for regulation by Congress.
7 Metaverse Stocks That Might Be Out of This World
If you’re a little confused as to what the Metaverse is or what’s about to happen. You Are Not Alone In fact, as late as November 2021, many top tech leaders who have plans for the Metaverse were struggling to define the Metaverse.
One of the best descriptions I’ve heard is that Metaverse will be Web 2.0. This gives participants the opportunity to interact in an interactive world that combines virtual reality, augmented reality and video. It would be a world where you could go to digital representations of real houses and buy digital representations of objects in the real world.
However, it also seems too easy. as it is described meta platform CEO Mark Zuckerberg, this will be a world where your avatar can be more realistic, albeit virtual, with friends and family far away. I hope it’s not just me, but the whole concept makes me feel… separate. What I know is strange because the whole point is the connection.
However, many tech companies are investing money in the metaverse, or at least their take on it. And institutional investors are paying attention. This combination is almost always an indicator of stocks that are on the way.
That’s the point of this article; To point you to seven companies that are likely to be major players in the metaverse. And after a sharp correction in the technology sector, this could be the right time to buy these stocks at a discount.
See “7 Metaverse Stocks That Might Be Out of This World.”