Job cuts, liquidity crises and the possible beginnings of a systemic collapse in the decentralized finance world. That's just the start of this absolutely rotten week for crypto.
What began with a lender freezing withdrawals has metastasized into a sector-wide panic, bringing down multiple firms and causing token prices to collapse. Here's a brief recap of crypto's week from hell:
Sunday
The UK crypto lending platform Celsius froze all withdrawals due to liquidity issues causing widespread panic in the market, causing traders to pull their money out of other exchanges. Celsius held over $11 billion in assets on its platforms and offered returns as high as 18% on funds deposited in its platform, a rate in hindsight investors found too good to be true. Some in the press are speculating this is a Lehman Brothers moment in the crypto world.
Monday
The price of the most popular cryptocurrencies, Bitcoin and Ethereum, fell about 15%.
The stablecoin USDD became unpegged from the dollar and its creator Justin Sun vowed to deploy $2 billion to keep the coin stable and fight off shorts made against it.
Tuesday
Coinbase (Nasdaq: Coin) announced it would layoff 18% of its staff or about 1,100 people. Other major crypto firms BlockFi and Crypto.com followed with similar announcements.
Wednesday
A report was released by the Block speculating that a major crypto hedge fund, Dubai-based Three Arrow Capital, is facing insolvency after being liquidated by its lenders. The firm had sustained heavy losses due to the price collapse of the Luna token earlier in the month.
Celsius hired restructuring lawyers to find a solution out of its financial problems.
Thursday
The CEO of Kraken went to war with his "woke" employees, publishing a manifesto essentially telling them to get with his libertarian, free speech program or leave the company. This may not be a sign of a collapsing market but seems to point to the idea that crypto CEOs are a bit on edge right now.
Friday
Babel Finance, another crypto lending platform similar to Celsius suspended withdrawals due to what the company described as "unusual liquidity pressures."
Bitcoin approaches a price of $20,000, down over 50% year to date.
