The latest market data shows that the price of Bitcoin touched $25,000 in a short time, and strangled back and forth at this point. The 24-hour decline has reached 7.4%, hitting the lowest point since December 26, 2020.
Ethereum, another pillar of the market, is even more tragic. 해시게임The latest quotation has fallen below $1,400 a piece and is sliding towards the $1,300 mark, down 11.01% in 24 hours, hitting the lowest point since March 1, 2021.
With the continuous decline of the two major cryptocurrency pillars, the total market value of cryptocurrencies has shrunk significantly.
According to CoinGecko data, on June 13, the total market value of cryptocurrencies shrunk to $1.07 trillion, with a 24-hour retracement of 7.6%, and it has lost more than half of its market value of 2.8 trillion from its peak in November 2021. Cryptocurrency market capitalization is set to fall back below $1 trillion as the slump continues.
With the advent of extreme market conditions, the liquidation of derivatives has become the fuel for skyrocketing and falling.
According to market data, in the past 24 hours, the Bitcoin contract was liquidated by $163 million, and the Ethereum contract was liquidated by $143 million.
More critical is Defi data. On June 13, Dune Analytics data showed that mainstream Defi lending protocols have liquidated over $12.7 million in the past 24 hours. Among them, Aave liquidated $4.516 million, Comppond liquidated $6.782 million, and MakerDAO liquidated $1.416 million.
In just one month, following the thunderstorm incident of the algorithmic stablecoin UST, another project is now in trouble, and the entire market has collapsed.
Since cryptocurrencies use smart contracts to build financial services, they are innovative but also contain huge risks. The algorithmic stable currency UST is a typical case.
Recently, a project called Lido and a crypto lending platform Celsius have become the “bombs” that are about to explode.
It is reported that the Lido project specifically provides users with ETH liquidity staking services. Users can lock any amount of ETH, and then receive the equity token “teeth” to earn income in Defi. After the Ethereum main net upgrade is complete, users can exchange their ETH back.
Investors in Lido are all top VCs in the crypto circle, namely a16z, Alameda Research, Coinbase, Paradigm, DCG, Jump Captial, and Three Arrows Capital.
Since each state can only be redeemed through the listing of the Ethereum beacon chain. Until then, the 12.8 million ETH in the ETH 2.0 staking contract was illiquid. And Lido holds 32% of the 12.8 million ETH (about 4.1 million).
Then, in theory, each “stETH” should be equal to one ETH, and the price ratio should be 1:1, but around June 10, its liquidity tilted, the price of teeth also broke off, and the value fell to 0.95 ETH. A large number of participating financial institutions began to withdraw funds and flee.
On June 13, according to the Curve page, the exchange ratio of stETH and ETH dropped to 1:0.9471, and the ratio of the liquidity pool is further inclined, of which stETH accounts for 79.91%, indicating that users do not want stETH.
Another financial institution, Celsius, is a whale holder of teeth. In fact, they are also the largest holders of interest-bearing teeth (on AAVE). This means Celsius is firmly tied to the safety of the Lido project.
However, Celsius has been repeatedly attacked by hackers in recent years, with a loss of more than 120 million US dollars, and its users also lost 500 million US dollars in assets in the UST project that just stormed.
On October 8, 2021, Celsius reported that its AUM exceeded $25 billion. Since Celsius is a private company, only its 19 and 20 years of financial data have been released.
What officials do not want to reveal is that Celsius may face liquidity risks due to losses from previous hacking incidents. And the market already thinks Celsius is on the verge of bankruptcy.
Once the project goes bankrupt, a large number of assets in its liquidity pool will be sold off, and users who use the project’s services will flee in large numbers, causing market panic.
On June 13, the crypto lending platform Celsius announced on its social networking site that it would suspend all withdrawals, transactions, and transfers. Officials said the move was in the interest of the entire community. After the news was released, its token CEL fell by more than 60% and is now quoted at $0.133.
The life and death status of these two projects will become one of the weather vanes of this round of market storms.
The current situation facing cryptocurrencies is that their market value is close to the volume of the last cycle, and the gains brought by the bull market that started at the end of 2020 have all been withdrawn.
With the decline of bitcoin, the bitcoin assets in the hands of Tesla, Wise Capital, and Grayscale Capital are also greatly devalued, and these American financial institutions will also suffer heavy losses.
Another market vane of the crypto market in recent years is the interest rate hike signal from the Federal Reserve. On June 14, the Federal Reserve will hold the FOMC to announce the interest rate decision. At the same time, Federal Reserve Chairman Powell will hold a monetary policy press conference.
And actions from the Federal Reserve will affect how much the cryptocurrency falls.