Results of the week: Bitcoin failed the level of $18,000, and Celsius and 3AC were on the verge of bankruptcy

Results of the week: Bitcoin failed the level of $18,000, and Celsius and 3AC were on the verge of bankruptcy

Results of the week: Bitcoin failed the $18,000 level, while Celsius and 3AC were on the verge of bankruptcy

Bitcoin and Ethereum fell below $18,000 and $1,000, respectively, Celsius Network and Three Arrows Capital were on the verge of insolvency, USDD lost parity against the US dollar and other events of the outgoing week.

Bitcoin price failed the $18,000 level, Ethereum — $1000

The first cryptocurrency opened the week fall. On June 13, its price fell below $23,000, and on Saturday broke through the $20,000 level, testing the range under $18,000.

Ethereum quotes have also been declining throughout the week. On June 18, the price of the asset at the moment fell to $881 (on the Binance exchange).

At the time of writing, Bitcoin is trading near $19,600, Ethereum is near $1060.

Results of the week: Bitcoin failed the level of $18,000, while Celsius and 3AC were on the verge of bankruptcy

Hourly BTC/USDT chart on Binance exchange. Data: Trading View.

Results of the week: Bitcoin failed the $18,000 level, while Celsius and 3AC were on the verge of bankruptcy

ETH/USDT hourly chart of the Binance exchange. Data: Trading View.

The flagships pulled the rest of the market with them – its capitalization fell below $1 trillion. All the largest digital assets were in the red zone at the end of the week.

Results of the week: bitcoin failed the $18,000 level, while Celsius and 3AC were on the verge of bankruptcy

Data: CoinGecko.

Index of fear and greed collapsed to panic at around 8 points, comparable to the values ​​of March 2020 and Black Thursday.

The week on the US stock exchanges opened with a significant drop in the shares of companies focused on the cryptocurrency industry: MicroStrategy, Coinbase, Silvergate Capital and others.

Due to the collapse of bitcoin, MicroStrategy                               s   s  s billion’s paper loss amounted to $56m. He assured that the company is ready to keep the cryptocurrency further.

Leading OTC platform Cumberland said that the  “biggest flows of the year” are now passing through the over-the-counter table, however, did not rule out a further decline in the market due to for the possible collapse of another leading stablecoin.

According to Glassnode, fundamentals have deteriorated, and now even long-term holders of cryptocurrencies are suffering significant losses. Investors net realized loss was a record $4.2 billion 

Coin Metrics noted that during the crash, miners sent a record 88,000 BTC to cryptocurrency exchanges.

The market downturn affected the Celsius Lending Platform

On June 13, the Celsius Crypto Lending Platform suspended withdrawals, exchanges and transfers between accounts “due to extreme market conditions”. The project token reacted with a 50% drop. 

According to experts, the decision of Celsius could be caused by losses when using high-risk DeFi tools, in particular, synthetic assets with collateral like Lido's stETH and Wrapped Bitcoin. Another large part of the platform's funds is locked on the Ethereum 2.0 deposit contract and is illiquid until the transition to the Proof-of-Stake (PoS) algorithm.

Competing platform Nexo announced its readiness to buy out Celsius' loan portfolio. On June 15, the CEL token rose by more than 50% on the back of data that the company strengthened its debt positions.

The network also reported that Celsius hired Citigroup to look for possible financing options, while as leading investors did not express a desire to save the company. Regulators in five states allegedly started an investigation into the incident. 

The largest hedge fund also got Three Arrows Capital

Singapore-based hedge fund Three Arrows Capital (3AC), a major investor in the industry's leading projects, has also begun liquidating assets to cover liabilities. In particular, the fund started converting stETH against the background of the collapse of Ethereum to $1,000, the price of liquidating a position in the Aave protocol.

3AC co-founder Su Zhu commented ambiguously on the situation, and the network began to speculate about the company's insolvency. At the same time, the head of 8 Blocks Capital, Danny Yuan, said that 3AC used $1 million of his company's funds in serviced accounts to cover margin calls. 

The fund is also known to have led a $1 billion Terra funding round in the past and was one of the largest holders of Grayscale shares at the end of 2021, which could indicate significant losses.

The BlockFi landing platform announced the liquidation of 3AC positions. Later it became known that the list of platforms was replenished BitMEX, FTX, Deribit and Bitfinex. Due to the scale of the hedge fund's activities, the uncertainty in its work has affected other projects, such as the Finblox staking platform. Some players who were funded by 3AC have stated that it does not manage their assets.

Tether noted that although the Celsius crypto lending platform is part of its investment portfolio, the negative events did not affect the financial stability of the USDT stablecoin issuer. Rumors about a loan to the Three Arrows Capital fund were called untrue by the company. At the same time, Tether denied speculations about the dominance of Chinese commercial paper reserves.

At the end of the week, 3AC co-founder Kyle Davis said that the fund was exploring the possibility of selling assets and “financial assistance” from other companies, and also trying to negotiate with creditors on deferred payments.

At the end of the week, one of the largest cryptocurrency lenders and asset managers in the Asian region – Babel Finance – also announced a lack of liquidity due to market volatility and the suspension of payments and withdrawals from its own products.

What about stETH from Lido?

As a result of the liquidation of positions in stETH by large crypto investors like Alameda, Three Arrows Capital and Celsius, the synthetic asset has lost its pegging to Ethereum. By Friday, only 0.935 ETH was offered for 1 stETH. 

Since May, the total value of assets in the ETH/stETH liquidity pool of the Curve protocol has decreased from $4.5 billion to approximately $620 million. The pool’s imbalance also puts pressure on the price: ~111,300 ETH accounts for ~491,000 stETH.

The USDD stablecoin briefly lost its peg to the US dollar. Tron DAO made a number of unsuccessful attempts to stabilize the exchange rate

On June 13, Tron's algorithmic stablecoin USDD briefly lost parity against the US dollar and dropped to $0.97. The DAO behind the reserves of the Tron asset sent 700 million USDC to protect the peg, but this did not help – on June 15, the rate fell to $0.95.

The      activity   from Waves (on June 15 it dropped to $0.76). After that, the South Korean exchange Upbit issued a warning for users about the risks associated with algostablecoins.

As the Tron market plunged, the DAO announced that it would withdraw 2.5 billion TRX from the Binance platform “to protect the blockchain industry and the cryptocurrency market.” Later, the organization announced the withdrawal of another 3 billion coins.

What to discuss with friends?

  • Binance will limit the deposit and withdrawal of Litecoin using the MimbleWimble privacy feature.
  • Founder of BlockTower Capital assessed Bitcoin's survivability on the example of the dot-coms of 2000.
  • Ukraine launched a bond-backed token.
  • Elon Musk, SpaceX and Tesla sued $258 billion for promoting Dogecoin.

Massive layoffs against the backdrop of crypto winter

The started trend for mass layoffs is gaining momentum. This week, Crypto.com CEO Chris Marszalek announced the optimization. According to him, 260 employees or 5% of the staff will leave the company.

Due to the deteriorating market conditions, Coinbase will cut its staff by about 18%, CEO Brian Armstrong said. BlockFi crypto-lending platform announced a reduction in its staff of more than 850 employees by approximately 20%.

Against the background of the general negative trend, the leading exchange Binance stands out. Its head, Changpeng Zhao, on the contrary, announced the opening of 2,000 new vacancies, noting that winter is a good opportunity to prepare for the next bullrun.

This week, Kraken cryptocurrency exchange CEO Jess Powell presented a document on corporate culture of the company and invited all employees who disagree with its content to quit.

Circle Introduces Euro-Pegged Stablecoin Euro Coin

Euro-pegged stablecoin Euro Coin (EUROC) is backed by euro-denominated reserves held by financial institutions “within the US regulatory perimeter”. One of these organizations will be Silvergate Bank.

At the start, Euro Coin was launched on the Ethereum blockchain as an ERC-20 standard token. Circle will add support for additional networks in the future. The start of trading scheduled for June 30.

Also on ForkLog:

  • The community warned of possible liquidations of whale positions in ETH and SOL.
  • The head of Nexo compared the crisis in the crypto market with the banking panic of 1907.
  • Mark Cuban predicted the disappearance of crypto projects without “real prospects”
  • An expert described a potential scenario for destabilizing the DAI rate

What else to read and see?

There are only a few months left before the long-awaited update of the Ethereum network – The Merge. ForkLog figured out the features of the upcoming upgrade and its potential impact on the investment attractiveness of the second largest cryptocurrency by capitalization.

They explained how Celsius, 3AC and stETH are connected, and also talked about the impact on the market of their potential bankruptcy and the possible collapse of the “staking ether”?

In ForkLog's educational cards, we looked at what Lido, liquid staking and Web3 are. Found out what happened to the Celsius platform.

Traditional digests collected the main events of the week in the areas of cybersecurity and artificial intelligence. 

Blockchain technology remains one of the hottest trends among financial, government and commercial organizations around the world. ForkLog magazine offers an overview of the most interesting recent initiatives.

On June 13, ForkLog LIVE discussed market movements and much more with our guests:

  • Anton Kravchenko – Founder and CEO Xena Exchange;
  • Ton Weiss, bitcoin evangelist, trader;
  • Mikhail Chobanian, founder of the KUNA.io exchange.

This week we also released a special report on how women will change the world of blockchain and cryptocurrencies.< /p>

Read ForkLog bitcoin news in our Telegram — cryptocurrency news, rates and analyte ika.