Celsius, a U.S. crypto lender, was an excellent spot for Jeremy Fong to store his digital currency assets while still earning some spending money thanks to its double-digit interest rates.
At sites like Celsius, Fong, a 29-year old aerospace worker who resides in Derby, central England, said, "I was maybe earning $100 a week." "That'll take care of my groceries."
Fong's bitcoin, which accounts for around a fourth of his portfolio, is now locked at Celsius.
Last week, the New Jersey-based crypto lender blocked withdrawals for its 1.7 million users due to "extreme" market conditions, sparking a sell-off that wiped hundreds of billions of dollars off the paper worth of cryptocurrencies throughout the world.
Fong's long-term crypto holdings have dropped by roughly 30%. "Definitely in a very unpleasant situation," he says. The fall of two other large tokens last month rocked a crypto market already reeling from surging inflation and increasing interest rates, which has prompted a flight from equities and other higher-risk assets.
For the first time since December 2020, Bitcoin dipped below $20,000 on June 18. This year, it has dropped by around 60%. The total value of the cryptocurrency market has dropped to roughly $900 billion, down from a high of $3 trillion in November.
Individual investors throughout the world have been hurt and perplexed by the downturn. Many people are enraged by Celsius. Others swear they'll never invest in cryptocurrency again. Some, like Fong, seek more control over the unregulated sector.
Hargreaves Lansdown analyst Susannah Streeter compared the chaos to the dotcom stock crash. Early in the 2000s, when technology and low-cost capital made it possible for private investors to invest in cryptocurrency.
She explained, "We have this combination of smartphone technology, trading applications, cheap money, and a highly speculative asset." "That's why you've seen such a dramatic ups and downs."
Investors - primarily individuals - who deposit their coins with crypto lenders such as Celsius are offered high-interest rates. The monies are subsequently invested in the wholesale crypto market by these unregulated lenders. find out more
The company's problems appear to be linked to its large-scale cryptocurrency investments. Due to the larger crypto market fall, the firm was unable to pay client redemptions when these investments turned sour. find out more
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