The most powerful collapse in the history of digital currencies led to the disappearance of 1 trillion dollars
The strongest bleeding in the history of digital currencies, which it experienced last week, as the bitcoin collapsed to below 21 thousand dollars, to continue its collapse to its lowest level in a year and a half.
The collapse of cryptocurrencies was the reason behind the evaporation of 1 trillion dollars in total value from the cryptocurrency market, and this is the first time since 2021.
The dangerous collapse of the decentralized currencies is the latest fear in the hearts of investors, fearing that more collapse will occur in the coming days.
Celsius company doubled the extent of fear among investors, as it temporarily suspended all its accounting operations, as some considered it bankrupt, which led to fears for investors
The most famous cryptocurrency exchange Coinbase receives a downgrade in its rating by JP Morgan, despite what the platform confirmed that it will struggle to regain its sovereignty amid a complete collapse of currencies, which cost it heavy losses.
Due to the losses incurred by the most famous currency in the market, which is Bitcoin and its siblings of digital currencies, the President of El Salvador is still urging to continue investing in the Bitcoin currency, thinking that his country was not affected by the collapses that the market witnessed.
Due to the continued collapse of cryptocurrencies, Coinbase Global, the largest stock exchange in America, has frozen employment offers as the cryptocurrency market continues to collapse, and one of the factors affecting the market collapse is the rise in inflation in the United States of America to its highest level in nearly 40 years.
The high rates of inflation in the United States of America made digital currencies come under the control of the Us Federal Reserve, which is striving to save its currency, the US dollar, especially the sensitive period with Nasdaq.
Due to digital currencies, they have lost some of their popularity and confidence, due to the collapse of the Luna currency in the past months, which prompted people to attack these high-risk assets as useless.
This booby-trapped market has caused many people to lose their money as a result of the collapse led by Bitcoin with the rest of the other digital currencies. Will this collapse be the beginning of the end of digital currencies!.
Bitcoin presents its worst performance since 2011
The largest digital currency in the world lost nearly 58% of its value in the middle of 2022, and nearly $1.2 trillion of cryptocurrencies have been lost in the market.
Due to the great collapse that hit the market, the cryptocurrency companies decided to stop workers and move from the industry towards consolidation and make acquisitions.
4 factors that caused pressures for cryptocurrency miners
- Macroeconomic pressures
The US Federal Reserve's decision to raise interest rates twice Respectively, as the US Federal Reserve did not do it for a long time, in the context of combating inflation that hit the economy, as the United States of America feared a recession in its economy or in the economies of other countries.
- The collapse of the stable cryptocurrency TerraUSD
It is a stable currency, the stablecoin is usually supported by the American Olar currency, but it belongs to the family of decentralized currencies, that is, it is encrypted, but the stable currency system failed, which led to the collapse of the terrausd currency and this was a major reason for the demise of the currency.
- Cryptocurrency Lender Celsius Temporarily Pausing Withdrawals
The largest cryptocurrency lender Celsius has set up its services, which is to withdraw for workers temporarily, especially the offer made by the company to users who deposit their money in the cryptocurrency market, they will get returns of more than 18%, so that the company in turn lends that money to investors who may save the market By paying them a high borrowing interest rate, but the scheme failed due to the low prices
- Liquidation of Three Arrows Capital . Fund
Three Arrows Capital is a ten-year-old crypto-focused hedge fund, also known as AC3, which is best known for its use of margin in the cryptocurrency market.
AC3 was hit by the collapse of the terraUSD coin and its sister token, Luna.
According to a report in the Financial Times last month that US-based cryptocurrency lenders BlockFi and Genesis were liquidating their positions within the company, BlockFi lent to AC3 until the latter could not meet margin calls.
A margin call is a situation in which an investor has to deposit more money to avoid losses in a transaction made with borrowed money, and AC3 defaults on a loan of over $660 million from Voyager Digital.
