This week’s cryptocurrency crash is an ongoing scene, with the total market cap of all blockchain assets shrinking to around $844.5 billion, a level not seen since the start of 2021. Bitcoin (BTC) has dropped well below $20K, having lost a third of its value in the past seven days. Ethereum (ETH) is also at the bottom of the price, dropping below the $1K threshold, down 32% over the week. Other leading cryptocurrencies that have seen declines of 30% or more this week include Monero (XMR), which is down nearly 33% to $110, Cronos (CRO), which is down 30% to $0.10, and Polygon ( MATIC), which is down 34% to $0.35. Each of the top 30 cryptocurrencies, with the exception of stablecoins, has dropped double-digit percentages since the 11th. Tether spent time on Saturday (18) trading just below its peg at $0.9988. This Sunday, (19) parity was already restored.
The collapse of Celsius – which has blocked all withdrawals and withdrawals from its platform – may have catalyzed market chaos this week, because it came just a month after another major DeFi project melted: Terra. To understand how they compare, just look at the business models: Celsius offers over 7% return for locking stablecoins like USDC and Tether, 7.25% for Polygon, 6.25% for Bitcoin and 6% for Ethereum. The protocol then lends its pooled tokens at higher rates. Now, Earth’s dollar-pegged stablecoin, UST, hit zero last month after its primary use case — earning 20% yields on Anchor — was compromised by market uncertainty. A mass exit ensued, taking billions of UST to be burned to mint LUNA at a rate too fast for the indexing algorithm. While Celsius did not collapse as quickly as Earth, many funds fled: in the first half of 2022, the total amount of digital assets locked in the protocol shrank from around $24 billion to $12 billion. On Wednesday, embattled Celsius CEO Alex Mashinsky broke a three-day silence to try to give some strength to the Celsius community, but gave no clues as to when users would be able to withdraw funds again.
@CelsiusNetwork team is working non-stop. We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.— Alex Mashinsky (@Mashinsky) June 15, 2022
On Thursday, a report in The Wall Street Journal suggested that Celsius’s main investors are not prepared to bail out the company. There have also been industry-wide talks about a “prolonged crypto winter.” BlockFi, a rival to Coinbase and Celsius, is reducing its workforce by up to 20%. Meanwhile, Binance assures you that it is hiring. *Translated with permission from Decrypt.com. The post Crypto Weekly Summary: Bitcoin and Ethereum Drop 30% Amidst the Chaos of Celsius Collapse appeared first on Bitcoin Portal.