It may be summer where you live, but the cryptocurrency industry has frozen over with Bitcoin (BTC) flirting dangerously with the $20,000-threshold and a litany of unfortunate events taking place. The biggest news this week is Coinbase deciding to let go of 1,100 employees.
The decision attracted a lot of criticism but not so much because the embattled cryptocurrency exchange with mounting costs and losses decided to let go of some staff, but because of the abrupt and sudden nature of the layoffs.
Confidence in cryptocurrency markets has been shaken to its core, and while many experts advise to brace oneself and weather the storm, a big selloff is underway. It seems to be mostly institutional though, as consumers are still willing to buy cryptocurrency.
A recent survey found that 91% of respondents in the US would hodl their cryptocurrencies and buy new digital assets. The crypto winter is an ideal time to do this. But the current crypto climate has uncovered festering issues among many companies in the space.
Celsius is currently withholding withdrawals from consumers and has brought in restructuring attorneys. This comes at a time when the second biggest cryptocurrency YouTuber has publicly criticized the company and accused Celsius of blocking existing funds and prohibiting consumers from paying loans on the platforms.
Instead, Celsius is asking for fresh money. The YouTuber, Ben Armstrong, has threatened to sue the company and bring others in on his lawsuit. He is incredulous that Celsius, which is practically insolvent, would ask for more money given the circumstances.
So far as the general cryptocurrency market goes, some former pessimists are now optimists, despite the sharp downturn. Celsius is hardly the only company that is being threatened with a lawsuit. But while the company can potentially wiggle out of a costly lawsuit by calling bankruptcy, Binance probably cannot.
A plaintiff is now seeking justice for the fact that the company misled him, advertising the Terra USD cryptocurrency as a “safe bet”.
These challenges have not swayed the company from its long-term ambition to continue expanding. In fact, compared to other cryptocurrency exchanges, Binance seems to be the only one sticking to its growth targets, including stepping up its recruitment.
Meanwhile, a new report by McKinsey puts the value of the metaverse at $5tr by the year 2030, with many executives interviewed agreeing on a similar target. Still, return on investment from metaverse projects remains difficult to gauge in the long term.