Crypto weekly roundup, 13th - 19th June!

Oliver Moon at Team UMushroom

22 Jun 2022

Celsius enters a liquidity crunch and the crypto market tumbles.

Market Recap:

The overall crypto market cap dropped to just under 900 billion USD, experiencing a weekly fall of almost 19%.
- It was another full-scale rout as Celsius encountered liquidity troubles.
- The week marked the first time the crypto market has fallen below a 1 trillion in market cap in over a year.

This week was another tough one, with Bitcoin and Ethereum having a particularly bad week, dropping almost 20% each.
- These weekly losses are representative of both troubles inside of crypto (Celsius and UST) as well as outside pressures and general market conditions.
- Solana made surprise gains of 11%, as its block production troubles are being slowly left behind.
- Bitcoin dropped briefly below the $20,000 mark before finishing the week just above it.

In the News:

Celsius hit major liquidity problems and was forced to freeze withdrawals. The worrying sign for crypto banks caused a more general market downturn. The worrying sign for crypto banks caused a more general market downturn.
- Celsius halted all withdrawals last week.
- Celsius promises a risk-free high rate of returns for users depositing their crypto into Celsius.
- It used highly leveraged and risky, illiquid staking mechanisms to pay this return.
- The market problems over the last few months have meant that the bank was stuck with losses.
- Constant withdrawal pressure led to more risky investments and eventually Celsius halting withdrawals altogether due to lack of liquidity.
- This was a big contributing factor to such a massive loss to the overall market cap last week, as well as BTC’s and ETH’s price both dropping around 20%.
Some big cuts and some big recruitment. Crypto.com, BlockFi and Coinbase are laying off a combined 1,500 employees, meanwhile Binance, Kraken and Polygon are looking to fill/ have filled 2500 positions.
- Crypto.com and BlockFi to cut over 400 jobs combined.
- Coinbase will lay off around 1,100 employees.
  - Coinbase's CEO admits Coinbase expanded too quickly.
  - Coinbase’s stock price has fallen 85% since Nov. 2021.
- These announcements follow a general crypto market downturn and are potentially preparation for a looming general recession.
- On a slightly more positive note:
  - Binance has 2000 open positions.
  - Kraken is going to hire 500 more staff.
  - And, Polygon has recently added 50 senior staff to its roster.
The EU finance commissioner called for speedup with legislation.
- EU finance minister Mairead McGuiness has said that the MiCA crypto proposal should be sped through EU legislation process.
- The MiCA seeks to legislate crypto at the EU level, setting up licensing requirements for crypto-asset services and cryptocurrency issuers.
- It could also help complete sanctions against Russia.
- This comes in response to the Tether debacle, and Celsius’ problems earlier in the week.
Goldman Sachs executes the first trade of an Ether linked derivative.
- On Monday Goldman Sachs executed its first Ethereum non-deliverable forward.
- It is a forward that pays out based on the price of ETH, offering investors direct over-the-counter exposure to the crypto market.