2022 has been an atrocious year for cryptocurrency. Many digital asset companies have been forced into dark places and filed for bankruptcy, and it looks like leading blockchain firm Block Fi might be next. Things Aren’t Looking Good for Block Fi Throughout 2022, the crypto space has been hit harder than it ever has in its short, 14-year history. Bitcoin, for example, has dropped from its all-time high of about ,000 per unit – which it achieved in November of last year – and has fallen into the mid-K range at the time of writing. The world’s number one digital asset has lost more than 70 percent of its value, and overall, the digital currency space has shed more than trillion in valuation. Many digital currency companies have also up and vanished because they
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2022 has been an atrocious year for cryptocurrency. Many digital asset companies have been forced into dark places and filed for bankruptcy, and it looks like leading blockchain firm Block Fi might be next.
Things Aren’t Looking Good for Block Fi
Throughout 2022, the crypto space has been hit harder than it ever has in its short, 14-year history. Bitcoin, for example, has dropped from its all-time high of about $68,000 per unit – which it achieved in November of last year – and has fallen into the mid-$16K range at the time of writing. The world’s number one digital asset has lost more than 70 percent of its value, and overall, the digital currency space has shed more than $2 trillion in valuation.
Many digital currency companies have also up and vanished because they can no longer deal with ongoing speculation and volatility. Several firms – including the Celsius Network, Voyager Digital, Three Arrows Capital, and recently top exchange FTX – have all entered bankruptcy proceedings. It’s a sad and ugly sight to see, and one that’s instilling fear in traders’ hearts.
Now, it has been insinuated that Block Fi could be the next to disappear, and investors are not happy. Not long ago, the company hinted in a statement that it was dealing with financial issues and that it was looking for ways to work around them. The company mentioned:
There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward.
The notice came after it had suspended withdrawals, which appears to be the token mark of a company that’s about to go under. Dan Ashmore, a crypto analyst, says everyone is on pins and needles following the dreadful collapse of FTX, which was considered one of the strongest and most stable enterprises in the crypto space. He said:
The FTX insolvency is devastating for the entire cryptocurrency industry. Bankruptcy proceedings are long, drawn out, and will likely only end with customers getting pennies on the dollar.
In a recent blog post, Block Fi appeared to contradict the idea that it was somehow running out of money, writing:
Block Fi has the necessary liquidity to explore all options, and we have engaged expert outside advisors that are helping us navigate Block Fi’s next steps.
People Will Panic
According to Cory Kippstein, however, this isn’t going to be enough to stop people from panicking. The chief executive of the bitcoin-buying app Swan Bitcoin said in an interview:
All of these centralized businesses with large piles of altcoins on their balance sheets are literally confidence games. They are inherently fragile, susceptible to a Lehman-like collapse at any time, and the only hope once under pressure is that another player will bail them out.