‘I’ve been saying for two or three years now that in crypto, a lot of the projects you see going on here are going to go to zero, but there are Amazon.coms in there somewhere. The major protocol layers, the significant network technologies, those are going to make it out here stronger than ever two years from now. The things that are going to get shaken out now are the scams, the charlatans, the easy money, those people are going to get shaken out in the next six months, and you’re starting to see that now.’ – Brian Brooks.
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Celsius Tanks 70% (in 1 Hour After) Company Pauses Withdrawals
Celsius is bringing down the entire cryptocurrency market. After the company halts withdrawals, Celsius drops to 70% in one hour. They’re a $10 billion company. A lot of people have a lot of crypto on this platform. If you do, if you have bitcoin on Celsius, you are no longer able to withdraw it. You cannot get access to it. This is to, as they say, stabilize liquidity. The crypto lender paused all customer withdrawals and swaps on Sunday night, citing liquidity issues. A cell token quickly falls off a cliff. I’m going to explain this simply by telling you what Celsius is, why they had to pause withdrawals, why this is a crisis for the entire industry, and what to think about going forward, particularly if you have money in Celsius and particularly if you’re in crypto at all, because this truly affects the whole market.
What is Celsius? How do they make money?
WHY DID CELSIUS FAIL?
Let’s break this down into what events exactly led Celsius to halt withdrawals. What happened to the money that they had on their platform? Part One:
Hopefully they did, bringing us to part two:
Leading us to part three:
You can understand it like this:
That loss in confidence inspires more and more people to withdraw, which causes more and more people to lose confidence, which causes more and more people to withdraw, etc. The big question is, if it’s not liquid, where exactly is the money? Well, a few places.
How does Celsius solve this huge problem?
That would be really unfortunate for anybody who has their money in Celsius. Not your keys, not your coins. This is obviously the safest way to protect your bitcoin, as long as you’re up for that responsibility of holding your own coins, but with crypto with bitcoin you have that power. Here’s the thing:
Brain Brooks’ Celsius Crisis Takeaway
Let’s jump back to Brian Brooks to shed more insight on what exactly we should be taking away from this crisis:
Brian, do you have any more information on what is going on with some of these issues, such as Celsius or Binance?
Absolutely, and listen, thanks for addressing this at this moment. It’s kind of a crisis for the crypto industry. What I tell you is that you have a perfect storm of multiple things all happening at the same time. So first you have Celsius blowing up. It’s the second big centralized crypto project in three weeks to blow up. That causes people to think the whole sector is infected at some level, which it isn’t. That’s a natural human reaction. The second thing you have is bitcoin had its enormous rise during a period of very high inflation building up the economy, and now you’ve got Federal Reserve action and Central Bank action around the world taking aggressive steps to reduce inflation, which is a bad thing for bitcoin over time as an inflation hedge. Finally, every stock in the S&P500, literally every 500 stock, is down by a significant margin today, including financials. It’s a perfect storm. Everything that could go wrong is.
I’ve been saying for two or three years that in crypto, a lot of the projects you see going on here are going to zero, but there are Amazon.coms out there doing the right things. Major protocol layers and significant network technologies are going to make it out here stronger than ever two years from now. Things are going to get shaken out now. The scams, the charlatans, the easy money guys, those people are going to get shaken out in the next six months, and you’re starting to see that now.
Final thoughts
Everything is going to work out. The crypto market is getting battle tested. The weaker projects, the less legitimate, are getting shaken out, and the stronger projects will come back with a vengeance. I want to encourage everybody to stick with cryptocurrency. The people that made the most money in 2021 were not the people that just showed up in 2021; they were the people that were watching us in 2018 and 2019 and 2020. I believe that’s where the biggest opportunities are made. The people who stick around during a bear market profit the most in a bull market. I don’t think I’m the first to say that.
[This article is a transcription of a video made by Altcoin Daily]
Original video: https://youtu.be/lGEHsOLd_mM ]
