Despite rising only slightly following yesterday's Federal Reserve rate hike of 75 points, cryptocurrencies are yet again feeling the pressures wrought by a myriad of factors, including destabilized markets, fears of an incoming recession, TerraUSD's previous depeg, and the slow crashing of Celsius.
At the time of writing, Bitcoin price sits at $20,891, a whopping 7.41% decline over the past 24 hours. Ethereum, too, dipped by about 11.35% and is now at $1,096, a record drop from a Nov. 2021-set $4,426 pricing of Ethereum's all-time high. Ethereum classic isn't faring well, either, down by 4.9% for the day at a price of $15.40 and experiencing a 71.92% drop in one year's time.
Smaller, lesser known cryptos are feeling the chill of the crypto winter, as well, expressed best via Polygon, which is currently trading at a low of .39 cents, down 73.87% for the year. Solana ($30.84), Dogecoin ($0.05), and Avalanche ($16.17) are all in the red, witnessing respective price drops of 2.3%, 4.79%, and 5.04%.
These ongoing pressures swirling about the crypto news of late are due largely to the increased panic associated with the Fed's interest rate hike yesterday, affecting not only both securities and digital assets but also everything from mortgages to airfares. Beyond that, Bitcoin and Ethereum both drive the values of several cryptocurrencies within the market, meaning that a lot of the other assorted risk assets are tied to the larger price points, making any dips a market-wide event.
Additionally, recent happenings surrounding the cryptocurrency lending platform Celsius have caused major fears within the market, weighed down by the previous disaster known as TerraUSD. Acting akin to a digital asset bank of sorts, which boasted impeccable gains of around 18.6% annually, Celsius no sooner began to lose its ground in the face of the current fearful climate.
In October of 2021, Celsius Network CEO Alex Mashinsky highlighted the total assets under the lending platform as equalling $25 billion, more than enough capital to service both lenders and borrowers on all of their DeFi needs. As of last month, according to the Celsius website, its assets totaled $11.82 billion. Riddled by poor crypto investments and mass withdrawal, Celsius was hit with a rather gloomy future, thus causing the firm to halt all withdrawals and transfers on Monday, June 13, citing the necessity "to stabilize liquidity." This very decision is now being investigated by various securities regulators from New Jersey to Texas.
TerraUSD, the algorithmic stablecoin attached to its sister coin Luna, first set the crypto markets ablaze several months ago, costing the industry a recorded $400 billion loss. Fears still reign supreme following the stablecoins demise, and yet a new entity has arisen from TerraUSD's ashes, called Luna 2.0, which has experienced its own mess of failures since launching.
According to cryptocurrency research firm Kaiko, Celsius has little in the way of options in pulling itself from the gutter. Conor Ryder, the crypto analyst under Kaiko, relayed these sentiments in the firm's official report published on Wednesday, June 15.
"Even if they do survive this onslaught, I don't see how anyone can trust the likes of Celsius to keep their assets safe going forward. Perhaps in a few years time we will look back on this as a watershed moment for decentralized finance adoption, but that's probably just the optimist in me."
