Cesare Fracassi, a professor of finance at the University of Texas at Austin who runs the school’s Blockchain Initiative, believes that the fall of bitcoin below the psychological threshold is no big deal. Instead, he said the focus should be on the latest news from loan platforms.
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One of them, Celsius Network, said this month it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to its funds. Another platform, Babel Finance, said in a notice posted online Friday that it would suspend refunds and product withdrawals due to “unusual liquidity pressures.”
“There’s a lot of turbulence in the market,” Fracassi said. “And the reason prices are going down is because there’s a lot of concern that the sector is over-leveraging.”
Coinbase cryptocurrency exchange platform announced on Tuesday that it had laid off about 18 percent of its workforce, with CEO and co-founder Brian Armstrong blaming part of the “cryptographic winter” that is approaching.
Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.
Crypto had permeated much of popular culture before its recent fall, with Super Bowl ads promoting digital assets and celebrities and YouTube personalities regularly promoting it on social media.
David Gerard, a cryptocurrency critic and author of “The 50-Foot Block Chain Attack,” said recent mergers show a failure by regulators, who he believes should have done more scrutiny in the industry years ago. .
Many nascent investors, especially young ones, invested based on a false hope that was sold to them, he said: “Here are real human victims who are normal people.
Alex Diaz, the administrator of a Facebook group for Bitcoin enthusiasts, said he believes the bitcoin crash is not the fault of bitcoin but of parallel developments in the cryptocurrency space, some of which they are “just schemes or scams.”
“What it will take to recover is just time,” Diaz said.
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Chan reported from London. Associated Press journalist Leah Willingham in Charleston, West Virginia, contributed to this report.
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