Schlagwort: crypto business

Tether has announced that the USDT reserves “hold strongly” even as cryptocurrency lending provider Celsius (CEL) feels the heat of crypto volatility.

The stablecoin issuer, in a statement to this effect released on Monday, said the events wont have an impact on the stablecoin’s reserves.  

And going by events of not so long ago involving the collapse of TerraUSD (USD), Tether must have felt the need to issue a clarifying note.

“The recent events impacting the Celsius lending platform and its native token CEL are an unfortunate result of market volatility and extreme market conditions,” Tether noted. 

No correlation with USDT

According to the company, while its portfolio holds an investment in Celsius, it is but a “minimal part” of its shareholders equity. Notably, Tether said its investment in the crypto lender has no correlation to its USDT reserves.

Additionally, the lending activity between Tether and Celsius “has always been overcollateralized,” adding to the overall assertion that none of what’s happened with Celsius has an impact on the stablecoin issuer’s reserves. 

On Monday, Celsius announced a pause to all withdrawals, transfers and swaps as it tried to navigate massive volatility.

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” Celsius said in a message to the community.

The platform has not resumed the operations as at the time of writing. Meanwhile, the native CEL token is down 21% in the past 24 hours and nearly 96% down since its all-time high reached in January last year.

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BlockFi says its intention is to remain profitable amid the tough market conditions.

Crypto platform BlockFi has announced that it is cutting its employee numbers by 20%, following in the footsteps of other major companies in the industry.

The platform, which has seen significant growth over the past four+ years following the debut of its crypto-backed loan feature, says the job cuts will impact “every team at the company.”

According to a blog announcement from founders Zac Prince and Flori Marquez, the decision to let go of so  many of the platform’s staff is down to prevailing  macroeconomic conditions. The company says the move will be followed by a review of its strategic priorities. 

Cutting jobs to ensure company remains profitable

BlockFi’s employee count jumped from 150 at the end of 2020 to over 850 in 2022, with the massive increase coming on the back of greater growth underpinned by cryptocurrency’s incredible growth in 2021. It will now have 600+ employees.

The company, like most others in the crypto sector, experienced the pain of the ongoing bear market.

According to Zac and Flori, the staff reduction is part of wider measures undertaken over the past several months as they seek to remain profitable. The firm has reduced marketing spend, eliminated non-critical vendors and cut executive compensation. It also slowed down its hiring.

The company expects no material disruption to its services or products or services, the co-founders said in the blog post.

Other major companies to announce job cuts are crypto exchanges Coinbase and Gemini. Bitcoin and the broader crypto market has been in a downward trend since last November.

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Despite the bear market sentiment, most crypto holders have plans to purchase “some amount of crypto” before the end of the year.

A new survey by the Bank of America shows interest in cryptocurrencies remains high among Americans, with over 90% of respondents saying they planned to buy crypto over the next six months.

According to Jason Kupferberg, an analyst at Bank of America, the survey was conducted on 1 June, coming in the aftermath of the Terra Luna collapse. The sample size was 1,000 US adults.

In an interview with CNBC’s ‘TechCheck’, Kupferberg added that the percentage of respondents looking to buy crypto was similar to the number that said they bought during the first six months of 2022.

Bitcoin adoption and payments

On the use of Bitcoin and other cryptocurrencies, the bank says adoption is not very much pronounced.

However, with increased movement towards crypto-linked payment like Coinbase’ Visa card, the connection to merchants and users is much seamless and helpful towards new momentum in the sector.

Bank of America also says the crypto market is likely not seeing a major shift in global adoption to too many cryptocurrencies and crypto exchanges. Likening it to the dotcom era, Kupferberg says some of the projects are most likely going to fade away, before those that survive see greater adoption.

BTC and stocks price correlation

The BofA analyst also noted that Bitcoin continues to correlate highly with stocks, especially high growth tech stocks. This lockstep trading has a BTC price tank alongside downturns in the market, trending in a bear market as major stocks sold-off.

On Monday, Bitcoin price fell nearly 18% as negative headlines around Celsius Network compounded the downside pressure. BTC/USD fell to a 24-hour low of $22,725. 

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The cryptocurrency market has lost more than $200 billion over the past few days, and many attribute the crash to Celsius’s withdrawal changes.

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The cryptocurrency market experienced another crash over the weekend. The total cryptocurrency market cap dropped from the $1.2 trillion level it stood at a few days ago to currently stand at $945 billion.

Bitcoin, the world’s leading cryptocurrency, has lost more than 17% of its value over the past 24 hours and currently trades around $23k per coin. 

Some market experts attribute the latest crash to Celsius Network pausing its withdrawals. 

Celsius Network is one of the biggest lenders in the cryptocurrency space. The company controls more than $12 billion in assets under management.

The company told its users that;

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swaps, and transfers between accounts. “Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets, and we are working diligently to meet our obligations.”

However, Marcus Sotiriou, Analyst at the UK-based digital asset broker GlobalBlock told Coinjournal that the market crash was not solely due to the Celsius Network pausing withdrawals. He said;

“Despite the fear, uncertainty, and doubt the Celsius debacle has caused, the sell-off started at the beginning of the weekend on Friday, after the U.S. inflation data was released. CPI was reportedly 8.6% year over year in May, which is a 0.3% increase compared to April, showing that inflation is ramping up rather than slowing down. I think this is a bigger contributor to the decline we have seen, as it results in a more hawkish Federal Reserve – they are now forced to remove more liquidity from the market in order to bring down inflation. When liquidity is removed, risk-on assets are hit the hardest, which includes crypto.”

Despite the ongoing bearish sentiment, Sotiriou said investors should remember that this period of persistent inflation should pass, and the crypto industry will become more efficient as unsecure and incompetent firms are weeded out bit by bit.

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According to a tweet posted by Binance CEO, Changpeng Zhao, the crypto exchange has temporarily suspended Bitcoin (BTC) withdrawal as a result of the current market turmoil.

Temporary pause of $BTC withdrawals on #Binance due to a stuck transaction causing a backlog. Should be fixed in ~30 minutes. Will update.

Funds are SAFU.

— CZ 🔶 Binance (@cz_binance) June 13, 2022

However, the CEO has assured their customers that their funds are safe noting that the withdrawal suspension is connected to a backlog triggered by a stuck on-chain transaction. 

In an official announcement, it was confirmed that the Binance team is currently working on the problem. Zhao noted the team will have fixed the issue within thirty minutes. 

Major crypto exchanges were affected too

When there is severe market volatility, major crypto exchanges also experience performance issues. At the time of writing, the largest crypto by market cap, Bitcoin, the price has dropped to as low as $23,591.83 down 13.67% in the last 24 hours extending its bearish streak.

Since January 2021, this is the first time the total crypto market cap has dropped below the $1 billion level. According to the data from CoinGlas, a crypto analyst firm, there is about $316 million worth of cryptos in liquidation.

Additionally, the crypto market has also been hit by the Celsius mess and the deteriorating macro conditions. Earlier today, one of the largest crypto lenders, Celsius, had paused all the withdrawal transactions. Following the Celsius announcement, its native token (CEL) lost half of its value causing fears among the crypto enthusiasts and investors.

However, Binance recorded over $28.7 billion worth of traders in the last 24 hours overshadowing its closest competitors, Coinbase and FTX.

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