The industry is in crisis mode. One crypto company has frozen all withdrawals, others have announced employee layoffs.
Many have jumped on the crypto wave over the past few years. While since 2000 the prices for the Bitcoin and other virtual currencies soared, crypto startups proliferated. Companies that market digital currencies to investors even aired their TV ads in the US.
Newfangled lending deals offered sky-high interest rates on crypto deposits. Trading platforms like Coinbase, which allow investors to trade digital assets, hired people en masse. But times have changed.
Crypto in crisis mode: “The music has stopped.“.
A global industry worth hundreds of billions of dollars emerged virtually overnight. It’s currently collapsing. After weeks of falling prices for numerous cryptocurrencies, Coinbase announced on Tuesday that they 18 percent of their employees laid off. They were preceded by other companies such as Gemini, BlockFi and Crypto.com. Coins from high-profile startups like Terraform Labs (operators of Terra LUNA) have all but imploded, wiping out years of investment.
Crypto lender Celsius is holding back assets
Last Sunday, experimental cryptobank Celsius Network halted its withdrawals overnight without any notice. Apparently they had run out of money.
Some analysts believe the setback in the crypto ecosystem highlights the uncertainty of its structure. The total value of the cryptocurrency market has increased by about 4948 since last autumn percent dropped.
Some analysts believe the sell-off will continue. Crypto company stock prices have plummeted, depositors have liquidated their investments, and some industry executives are predicting a prolonged slump that could put more companies at risk.
“ We see that many of these companies and platforms have been standing on shaky and unsustainable foundations ,” said Lee Reiners of the New York Times, a former Federal Reserve official who teaches at Duke University Law School. Reiners in the original tone: “The music has stopped.“