During the California Gold Rush in 1849, the few to make a fortune were the pickaxe and shovel dealers and Wells Fargo, which kept prospectors’ gold. For cryptocurrencies, the gold of the XXIe digital century, a similar bet could be attempted: those who would come out of it would be the exchange platforms, which take juicy commissions during each transaction, and the “miners” who run the system with electricity and are paid in bitcoins. It is not so. Everything collapses, with the crisis of the most famous of cryptocurrencies, whose value fell from a high of around 69,000 dollars (66,150 euros), in November 2021, to 22,000 dollars, Tuesday, June 14. As of November 2021, all bitcoins available were worth approximately $1.32 trillion. Today, their value has risen to 420 billion dollars: the trifle of 900 billion dollars has evaporated.
This debacle forced Coinbase, a major cryptocurrency exchange and depository, to cut nearly a fifth of its workforce. The 1,100 interested parties, who will get more than 3.5 months’ salary, which is high in the United States, received the notice on their personal email, because they were “disconnected” from Coinbase’s internal system in advance. “It seems that we are entering a recession after an economic boom of more than ten years. A recession could lead to another crypto winter and could last for an extended period”, explains to his employees Brian Armstrong, the founder of Coinbase, who bought a $ 133 million house in Los Angeles in December. The firm, which charged several percentage fees on each transaction, had already announced losses in May, and its stock price has been divided by seven since September.
This “crypto winter” is due to the recession which reveals the nature of these instruments. They have none of the attributes of a safe haven, including against inflation: zero intrinsic value, non-existent guaranteed income, absent stability. Instead, they behaved like the most speculative tech stocks, boosted by free money. In this panic, other platforms suffered near failures. On Sunday evening, Celsius, a platform that manages $11 billion and lends its customers’ deposits to others, announced that it was suspending all withdrawals and trades from its customers..
In May, TerrasUSD had already collapsed. This cryptocurrency supposed to have the same value as the dollar was not able to hold this parity. Today, it turns out that the system is ultra-risky and unreliable. Already, those who are infatuated with bitcoins and their avatars are looking for culprits, and the wall street journal even devotes an article to the imprudent who have multiplied advertisements for cryptos, such as Kim Kardashian or boxer Floyd Mayweather.
You have 21.61% of this article left to read. The following is for subscribers only.