By Julia Horowitz, CNN Business
When I’ve spoken to backers of digital currencies recently, many have put a positive spin on the deep “crypto winter” that’s set in.
Their pitch: As prices plunge and turmoil spreads across the market for cryptocurrencies, weaker or dubious projects will fail. Only solid businesses will reach the next chapter, establishing a stronger foundation.
Even if you subscribe to that logic, however, the interim period promises to be messy.
Celsius became the latest firm in the industry to file for bankruptcy on Wednesday. The crypto lender, which has 1.7 million users, froze withdrawals and transfers last month, citing “extreme market conditions.”
Another crypto lender, Voyager Digital, filed for bankruptcy last week. It said the “prolonged volatility and contagion in the crypto markets over the past few months,” as well as the default of a customer on a loan, required “deliberate and decisive action.”
Investor insight: There are likely to be more casualties in the coming months. Bitcoin is languishing below $20,000 as fear continues to dominate investor sentiment, squeezing those who made risky bets when prices were much higher. The digital coin is off more than 70% from its November peak. Ether is roughly 78% below its all-time high.
(C) CNN
Crypto winter time: Prices plunge, companies collapse, skepticism soars
