- Celsius was first to announce that it will pause withdrawals and transfers.
- Two more firms have halted withdrawals.
- This demonstrates how interconnected cryptocurrency businesses are.
Celsius Network, one of the world’s biggest digital asset lenders, announced that it would be suspending all transfers and withdrawals. The move sent shockwaves through the industry, with many worried about what this could mean for the future of crypto. Three Arrows Capital and Babel Finance are also sinking, and it’s unclear how far the impact will spread.
Babel Finance, another major lending platform, soon followed suit. Three Arrows Capital, a well-known hedge fund, is also at risk of collapse. These events have put a spotlight on the interconnectedness of the cryptocurrency industry. They’ve also raised serious questions about the stability of the space.
These three businesses each dealt with different people but their failures have had similar consequences. This week began with a Sunday evening press release from the Celsius Network stating that it would halt withdrawals and transfers. Following this, the price of Bitcoin and other cryptocurrencies, which had been sliding for weeks in a “crypto winter,” fell even more, and five days later, the situation hasn’t changed much.
Celsius Community attracted retail clients. CNBC says that Babel Finance has 500 clients and raised $80 million in a funding spherical a month. According to Fortune, 3AC has $10 billion in assets under management and is invested in cryptocurrency firms. The ripple effects of the businesses’ failures is likely to have a significant influence on the entire cryptocurrency sector.
The interconnectedness of these businesses is what makes their failures so worrying to the crypto world. FTX, Deribit, and BitMEX have liquidated Three Arrows Capital’s positions over the past week according to reports. This has caused Three Arrows Capital to lose millions of dollars and forced it to sell some of its investments at a loss.
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