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Cryptocurrency Fall: Investors Are Withdrawing Money

The cryptocurrency industry is in turmoil as investors fear that large cryptocurrency investors may withdraw their money at once due to problems and if this problem is not addressed there could be a major upheaval.

Bitcoin has fallen 57 percent so far this year and 37 percent this month, according to Reuters, and fell below 20,000 on the weekend for the first time since December 2020.

Falling prices have exacerbated the plight of many of the industry’s biggest players, with fears of further declines as other corrupt investors are forced to sell their holdings to offset declining margins and losses.

The founders of the corrupt hedge fund Three Aero Capital told the Wall Street Journal in a report published Friday that they are considering various options, including asset sales and bailouts through another firm.

The US-based lender Celsius Network said earlier this month that it would halt funding withdrawals and that most of the industry’s recent problems stemmed from the worst fall in the so-called stable coin ‘Terra USD‘ in May. Can be estimated

The bitcoin was trading on both sides of USD20,000 on Monday, while the No. 2 coin at 75 1,075 fell below its symbolic level of 1,000.

“If the market goes up, everyone will breathe a sigh of relief, there will be reinvestment, and people will increase equity,” said Adam Farthenk, Japan’s chief risk officer at B2C2, a cryptocurrency provider. And all the dangers will be gone, but if we go too far down here, I think it could be a storm of total destruction.

He said a lot of credit was being taken out of the system and if lenders had to bear losses from Celsius and Three Arrow, they would reduce the volume of their future debt accounts, which meant that The total amount of credit available in the ecosystem is very low.

“It feels like 2008 to see how the effects of bankruptcy and liquidation could be felt in other sectors,” Farthing said.

Advances in cryptocurrency are in line with the decline in equities as US stocks suffered their biggest weekly percentage decline in two years due to fears of rising interest rates and the possibility of a recession.

Smaller cryptocurrencies have suffered more losses than large tokens because investors have sought to compare the safety of bitcoins and stable coins, which are valued at conventional assets and mostly the US dollar.

The value of the crypto market is about ً 870 billion, which has fallen sharply since November 2021, when it was at its highest level of 29 29 trillion.

However, the market capitalization of stable coins has also declined in recent months, suggesting that investors as a whole are withdrawing money from the sector.

The market cap of the world’s largest stable coin ‘Tether’ fell to about ً 68 billion from over 83 83 billion in early May.


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