Tyler and Cameron Winklevoss speaking at the Bitcoin Festival in Miami in June last year. Crypto companies are laying off staff, freezing withdrawals and trying to stem losses, raising questions about the health of the whole ecosystem.
Still, they expressed optimism about the future of the crypto industry. “The crypto revolution is well under way and its impact will continue to be profound,” they wrote in a memo. “But its trajectory has been anything but gradual or predictable.” It was compounded days later when terra, a so-called stablecoin that was supposed to move in tandem with the US dollar, and its sister currency, luna, crashed in a matter of days.
A bitcoin can be divided out to eight decimal places, so 0.00000001 is the smallest amount that can be handled in a transaction. Unlike regular fiat currencies, which are centralised and guaranteed by central banks that control their supply and where valuations are influenced by economic and monetary policy dynamics, bitcoin is run by a decentralised network of computers around the world that keep track of all bitcoin transactions.
“I think a lot of the money that was invested in crypto has been impacted by the move higher in rates, the move higher in yields, which increases the cost of funding on leveraged positions,” said David Beaton, chief investment officer with Cantor Fitzgerald Ireland, on a videocast for clients this week. “A lot of retail investors probably have borrowed to take their position in crypto currencies.
“And, two, we start seeing some [red] flags in some parts of this new market: the terra-luna’s collapse, the Coinbase warnings about ‘unsecured creditors’, and Celsius’s decision to halt activity on accounts are signs that the industry may not be ready for the storm,” he said.
IrishTimes Every market is down
More nonsense