This week was a volatile week for the crypto industry. Many crypto investors were told that there is no money to return them at the current moment. Furthermore, one of the nightmares of crypto parties came true this week. This was a dramatic event for the industry aiming to redefine global finance. Two crypto banks named Celsius Network and Babel Finance froze their withdrawals. The cause has been speculated around the ETH connections. However, there is more to this turmoil.
Connection of Celsius with Terra
As per the reports of Nansen, a Research firm, Celsius was also connected with UST stablecoin which has already lagged behind the dollar value in May. The situation with Terra blockchain caused the loss of around 10 billion dollars from the pocket of crypto industry participators. This happened to Terra, who was working based on algorithms and 19.5% yields in Anchor Protocol.
Nansen also confirmed after an analysis that the Anchor program of Terra was a crucial source of income for Celsius. So the damage to that yield source has also affected Celsius.
Shark Tank of Crypto
Currently, the crypto industry is going through a challenging phase instead of making tremendous profits. A few traders have also used bots’ support to tackle the blockchain in suspicion of forced liquidation. They might make around 10% to 15% on the collateral sales.
When this situation started getting settled, at last, the industry was already severely destroyed. Bitcoin saw losses for 12 days straight. After 2020, the slump sustained around $20000. One of the largest cryptocurrencies of the globe is now facing a down surge of around 70% since its last high in November. The highest value of Bitcoin was $70,000 in November. Currently, the industry is in a severe dilemma because of its sudden downs.
