![]() ![]() "I think that we're in a long drawdown period here," Jill Gunter, Espresso Systems co-founder & chief strategy officer, told CNBC's Squawk on the Street. ![]() It appears that investors can't shake the fears of recession, and some say it could take time for cryptocurrencies to recover from the sell-off in riskier assets. ![]() The losses were closely tied to a sell-off on Wall Street, in which the Dow fell 700 points to its lowest level in more than a year. Bitcoin fell to around $20,000, to prices it hadn't seen since the end of 2020. The Fed said the move was made in an effort to curb sky-high inflation.Ĭrypto prices initially rallied on the news as investors hoped we could avoid a recession, but that rally was short-lived. Then on Wednesday afternoon, the Federal Reserve raised its benchmark interest rates three-quarters of a percentage point in its most aggressive hike since 1994. "It's just made me Twitter famous, so I appreciate that.We feel like we have a fortress balance sheet, we're comfortable, and the margin loan is well managed." "The margin call is much ado about nothing," Saylor told CNBC earlier this week. What I am doing, I think, is doing my best to lead the way and to normalize the bitcoin-backed financing industry," said Saylor, who added that publicly traded crypto miner Marathon Digital also took out a credit line with Silvergate Bank.Īs bitcoin prices tanked this week, investors worried the company would be asked to put up more collateral for its loan, but Saylor said the fears were overblown. So I'm not telling people to go out and take a highly leveraged loan. MicroStrategy has used company debt to purchase bitcoin, and in March, Saylor decided to take another step toward normalizing bitcoin-backed finance when he borrowed $205 million using his bitcoin as collateral - to then buy more of the cryptocurrency. Saylor has said the company doubles as the first and only bitcoin spot exchange-traded fund in the U.S., so investing in MicroStrategy is the closest you'll get to a bitcoin spot ETF. MicroStrategy CEO Michael Saylor appeared on CNBC Wednesday morning to discuss concerns around his firm, which has made a $4 billion bet on bitcoin. "We've had Jamie Dimon and others talk about an upcoming economic hurricane and so given what's happening in the economy, it feels like the most prudent thing to do right now," continued Choi.Ĭrypto companies across the board are looking for ways to cut costs, as investors rotate out of the riskiest assets, pulling down trading volumes.Ĭ recently announced a staff reduction of 260 people, as did Gemini, which said it would lay off 10% of its workforce - a first for the U.S.-based cryptocurrency exchange and custodian. "We had the recent inflation report that came out that I think surprised many folks," explained President and Chief Operating Officer Emilie Choi. The company had previously cut spending and even rescinded job offers in the hopes of stabilizing its business. Investors were assessing the fallout of Celsius, and meanwhile, another crypto firm joined a growing list of companies cutting staff to try to shore up profits.Ĭoinbase announced it was laying off nearly a fifth of its workforce due to crypto volatility. TuesdayĬrypto markets appeared to stabilize on Tuesday, with bitcoin hovering at around $22,000 and ether at around $1,100. But that being said, you could still see a lot of liquidations with that collateral being sold off on DeFi protocols," continued Todaro. "What I would say is on the decentralized side - a lot of these DeFi protocols, a lot of those positions are over collateralized, so you shouldn't quite see the underfunding situation that could happen with centralized borrowers and lenders. "This risk certainly seems like it's just the beginning," said John Todaro, Needham's vice president of crypto assets and blockchain research. Those crazy high yields were what eventually came under scrutiny. It's like a product a bank would offer, except with none of the regulatory safeguards. dollar-pegged stablecoin project lost $60 billion in value and dragged the wider crypto industry down with it.Ĭelsius was known for offering users a yield of up to 18.63% on their deposits. The news rippled across the crypto industry, reminding some of what happened in May, when a failed U.S. Personal Loans for 670 Credit Score or LowerĬelsius effectively locked up its $12 billion in crypto assets under management, raising concerns about the platform's solvency. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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