Crypto Week Summary: Bitcoin and Ethereum Drop 30% Amidst Celsius Collapse Chaos

Charlie Taylor

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.

Celsius drop

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.

extended winter

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 The post Crypto Weekly Summary: Bitcoin and Ethereum Drop 30% Amidst the Chaos of Celsius Collapse appeared first on Bitcoin Portal.

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