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Domino still rotating – Cryptonews

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Last week, Binance Exchange CEO Changpeng Zhao (CZ) said that in the severe collapse of the cryptocurrency markets, the worst is likely over. After CZ’s announcement, we saw more volatile movements instead of quick and deep sell-offs.

It is unknown if the worst is really behind it, but one thing is certain: Major dominoes continue to fall in the cryptocurrency markets.

Source: Pixabay

The collapse of the Moon-UST ecosystem created a huge $ 40-50 billion black hole in the market. Cryptocurrency hedge fund Three Arrows Capital (3AC), which invested heavily in Luna, was unable to pay its debts. The company filed for bankruptcy on Friday. 3AC’s fund size reached $ 10 billion at one time.

Central cryptocurrency Celsius was also in danger of bankruptcy due to investments in Luna and 3AC. The bank stopped withdrawing client money funds on June 12. According to yesterday’s news, recovery talks with FTX Exchange were inconclusive. Because FTX detected a $ 2 billion gap in Celsius’s balance sheet and that was out of the question.

BlockFi and Voyager Digital, other central cryptocurrencies that have lent large sums to 3AC, also fell into a cash shortage as they couldn’t get their money back. FTX has taken on the role of savior for these companies as well.

FTX Exchange had previously made a $ 250 million loan to BlockFi. However, this amount was not enough as customers constantly wanted to withdraw their money. With a new agreement reached yesterday, the loan amount was raised to $ 400 million; FTX has acquired an option to acquire BlockFi for up to $ 240 million. BlockFi’s market capitalization was close to $ 5 billion prior to these events.

Voyager, on the other hand, used the $ 75 million loan offered to it. However, when filming requests continued, this organization also closed its doors on Friday. Voyager customers will no longer have access to their funds, at least for a while (or maybe not at all).

There are rumors in the market that other organizations are also in a difficult situation. Sam Bankman-Fried (SBF), CEO of FTX, looking to play a role almost like a central bank in this process, almost confirmed these rumors in his statements to Forbes magazine on Wednesday. SBF said:

“There are already some third tier grants that have secretly gone bankrupt. Some companies are also very open. It is impracticable to recover them due to significant budget deficits, regulatory problems or lack of business. “

SBF, on the other hand, used more positive expressions about Tether (USDT), which there were concerns about after the UST incident.

“I think the really bearish weighting views on Tether are wrong … I don’t think there is any supporting evidence (save).”

In all this hustle and bustle, it should not be forgotten that the situation in the classic markets is by no means encouraging. Around the world, economies are slowing down, markets are melting, the Fed will continue to raise interest rates, and a massive dollar burning program has begun. In particular, the amount of dollars burned as part of the Fed’s balance sheet reduction operation will reach tens, so possibly hundreds of billions of dollars in the coming weeks.

In such an environment, it would be advantageous to make our own plans considering that the dominoes will continue to decline for a while.

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