The Worth Of The Crypto Market Has Now Declined By $2 Trillion. Here Are 3 Surprising Truths From The Cryptocurrency Market’s Black Monday

June

14

By Awi Khan // in News

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Investors had nowhere to hide on Monday as the stock market, and cryptocurrency prices dropped.

The sell-off occurred after another report of inflationary pressures on Friday, making investors afraid that the Federal Reserve will keep raising interest rates rapidly, boosting the risk of a U.S. recession.

On Monday, the cryptocurrency market’s total capitalisation dropped by nearly 12% to $980 billion. Since its high in November 2021, the sector has shed more than $2 trillion.

On Sunday, cryptocurrency lender Celsius declared that it stopped transactions, withdrawals, and transfers on its platform due to “extreme market conditions.” Binance, the world’s largest crypto exchange, also temporarily suspended withdrawals but has subsequently restored operations, citing a “few small hardware problems” as the cause.

All of this is only the start of the awful news. On Monday, the cryptocurrency had a bad day. Here are three startling statistics demonstrating how gloomy the financial sector has gotten.

Bitcoin Is Now At Its Lowest Level Since 2020

Bitcoin, the world’s most important digital asset, dropped almost 13% on Monday to below $23,000, its lowest level since 2020. Despite a massive climb in 2020 and 2021, Bitcoin is only 20% above its highs from the previous crypto market top in December 2017, following this year’s crash.

While some supporters continue to “buy the dip,” industry analysts have warned that things may get worse before they get better.

Elon Musk And Michael Saylor Are Nearly $1.5 Billion Underwater On Their Bitcoin Bets

During this year’s crypto winter, Elon Musk of Tesla and Michael Saylor of MicroStrategy have both lost billions on earlier winning transactions.

In February 2021, Tesla paid $1.5 billion for 44,000 Bitcoins, and for a time, Musk and his team were major winners as the cryptocurrency’s price skyrocketed. However, things have changed after Monday’s losses. Even after earning gains of $128 million in March of last year, Tesla is around $500 million in the red on its Bitcoin gamble on paper. It’s possible, however, that Tesla has sold more Bitcoin since its last SEC filing.

Meanwhile, Saylor, whose business intelligence firm MicroStrategy has been pitched as a kind of quasi-Bitcoin ETF, is also losing money on his Bitcoin purchases following Monday’s fall.

Over the last five years, Saylor has spent about $4 billion on 129,218 BTC, although his assets are currently valued closer to $3.1 billion. If Bitcoin falls below $21,000, the CEO will face a margin call on the loans he used to buy it. MicroStrategy’s Bitcoin holdings, according to Saylor, will not be sold.

Stablecoins Are Showing Signs Of destabilization

With the recent collapse of the stablecoin TerraUSD still fresh in many people’s minds, the ongoing unpredictability in the stablecoin market this week has been troubling.

On Monday, the Tron Network’s decentralised USD (USDD) token temporarily lost its one-to-one peg to the US dollar, forcing the Tron decentralised autonomous organisation (DAO), or community-led body that administers the currency, to stake 700 million dollars in USD Coin (USDC) to defend the peg.

In a worst-case scenario, Founder Justin Sun claimed he would spend $2 billion to stabilise the so-called stablecoin and stated that the 15 percent drop in his cryptocurrency Tron on Monday was the consequence of an organised attempt by short-sellers.

 

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