Crypto’s recent crash leaves wishers stunned and battered

LONDON / MUMBAI / ANKARA (Reuters) – For Jeremy Fung, the US cryptocurrency lender Celsius was an ideal place to store his cryptocurrencies – and earn some of the money you spend on double-digit interest rates along the way.

“I probably made $ 100 a week” on sites like Celsius, said Fong, 29, a civil aviation officer living in Derby, central England. “It covered my errands.”

But now Fong’s crypto – about a quarter of his wallet – is stuck on a Celsius.

Sign up now to get unlimited access to for free

Sign up

A cryptocurrency lender in New Jersey last week froze the withdrawals of 1.7 million of its customers citing “harsh” market conditions, triggering a sale that wiped out hundreds of billions of dollars in fiat value from cryptocurrencies worldwide. Read more

Fong’s long-term cryptocurrency holdings have fallen by about 30%. “Probably in a very uncomfortable situation,” he told Reuters. “My first instinct is just to get it all done,” he said.

The centenary explosion came on the heels of the collapse of two other major currencies last month, shaking the crypto sector, which was already under pressure as rising inflation and rising interest rates sent stocks and other risky assets on the run. Read more

Bitcoin fell below $ 20,000 for the first time since December 2020 on June 18th. That’s a drop of almost 60% this year. The total crypto market has fallen to about $ 900 billion, from a record high of $ 3 trillion in November. Read more

The crash has left retail investors worldwide battered and paralyzed. Many are angry at Celsius. Others will never swear to invest in cryptocurrency again. Some, like Fong, want stronger surveillance of the free movement sector.

Susanna Streeter, an analyst at Hargreaves Lansdown, compared the turmoil to the collapse of Internet stocks in the early 2000s – where technology and cheap capital made it easier for individual investors to access cryptocurrency.

“We have this clash between smartphone technology, trading apps, cheap money and very speculative assets,” she said. “That’s why I saw meteorite ups and downs.”

Reuters graphics

“Move in the dark at 02.00”

Cryptocurrency lenders like Celsius offer high interest rates to investors – mostly individuals – who deposit their coins on these sites. These lenders, mostly unregulated, make deposits in the wholesale crypto market. Read more

Celsius’ problems appear to be related to its wholesale investments in cryptocurrency. With these investments faltering, the company has not been able to meet customer repayments from investors in the midst of the broader crisis in the cryptocurrency market. Read more

Freezing the recovery at 1 ° C was like a small bank closing its doors. But a conventional bank, which is under the supervision of regulators, will have some form of protection for depositors.

Among those affected by the 100-year freeze is 38-year-old Alisha Gee in Pennsylvania.

Gee has been investing “every last bit” of its salary in crypto since 2018, which has accumulated in the five-digit sum. She has $ 30,000 in Celsius deposits – part of her total cryptocurrency portfolio – and earns between $ 40 and $ 100 in interest per week, which she hopes will help her pay off her mortgage.

Just over a week ago, Ji received an email from Celsius stating that she was unable to withdraw money. “I walked in the dark at 2am and walked back and forth,” she said.

“I believe in business,” Gee said. “It’s not a good idea to lose $ 30,000, especially since I could have paid off my mortgage.”

Gee said she will continue to use the degree, saying she is “loyal” to the company and has never had issues before.

Celsius CEO Alex Mashinsky tweeted on June 15 that the company was “working non-stop,” but gave some details on how and when it would resume filming. Celsius said Monday it aims to “stabilize our liquidity and operations”.


For some, the enthusiasm for cryptocurrency has not been distorted.

“I’ve seen several bear market cycles so far, so I avoid any unexpected reaction,” said Sumnesh Salodkar, a 23-year-old in Mumbai whose cryptocurrency holdings are declining but still in positive territory.

For others, warnings from regulators around the world about the dangers of diving into cryptocurrency have become a reality.

Khelil Ibrahim Gucer, a 21-year-old in the Turkish capital Ankara, said his father’s $ 5,000 cryptocurrency investment has dropped to $ 600 since he introduced him to cryptocurrency.

“Knowledge can bring you this far in crypto,” Joser said. “Happiness is what counts.”

Another investor, a 32-year-old IT employee in Mumbai, said he had invested three-quarters of his savings – hundreds of dollars – in cryptocurrencies. The value decreased by about 70% -80%.

“This will be my last investment in cryptocurrency,” he said, asking not to be identified.

Regulators in countries around the world are working to build cryptocurrencies that can protect investors and deter risks for broader financial stability.

Last week, a US Treasury Department official said the turmoil in the cryptocurrency market triggered by the percentage result points to an “urgent need” for cryptocurrency regulation. Read more

Fong, a British investor who lost access to Celsius’s cryptocurrency, wants things to change.

“A little regulation would be good in principle,” he said, “but then I think it’s a balance.” “If you do not want a lot of organization, this is where you get it,” he said.

Sign up now to get unlimited access to for free

Sign up

Further reporting by Tom Wilson and Elizabeth Hawcroft in London, Nupur Anand in Mumbai and Es Toksabai in Ankara. Edited by Jane Merriman

Our criteria: Thomson Reuters Trust Principles.

Leave a Comment