Cryptocurrencies have been hot throughout 2021 and have been going down since the beginning
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On June 14, Coinbase, the largest cryptocurrency exchange in the US, announced the reduction of 18% of its workforce, equivalent to more than 1,000 people. CEO Brian Armstrong explained that the company is growing too fast and the risk of a recession could create the "next crypto winter".
Two other well-known crypto companies, Crypto.com and BlockFi, also announced staff reductions. "The situation is very bad. Many businesses lay off employees, operations decline, cryptocurrencies become a laughing stock on Wall Street," said Jeff Dorman, a manager at Arca, a digital asset investment firm. in America, comments.
The world of cryptocurrency has also witnessed a significant shift as investors become less and less interested. The Celsius problem could also prompt a tightening of regulation of cryptocurrency lenders and push their value even lower.
Lending platforms like Celsius take customers' cryptocurrencies to lend to others and earn a portion of the interest. Celsius also invests client funds in high-risk decentralized finance (DeFi) projects for profit. Individual investors look to Celsius because the interest is up to 18.6% a year, much higher than the interest rate on savings at the bank. However, many people are now realizing that companies like Celsius act like banks, but lack the built-in legal protections found in the traditional financial system.