14 Jul 2022 Simon Briggs
Inflation Dips The Crypto Sector, Celsius Files For Bankruptcy, MATIC Joins Disney’s 2022 Accelerator Program
Bitcoin tumbles due to inflation pressure
Inflation and market instability are still imposing great threats for the crypto sector, as key U.S. inflation data managed to push Bitcoin below the $20,000 mark, dragging the rest of the crypto sector with it. Despite what it seemed to be an accumulation stage in progress for the world’s largest crypto to date, Bitcoin failed to keep up with the pace and entered a nose dive from as high as $22,000 on July 8 to a low of just $19,000 five days later.
It turns out that U.S. consumer-price index (CPI) data showed a year-over-year inflation of 9.1% - the highest recorded level in 40 years. The inflation figures already caused havoc on traditional markets by plummeting both the S&P 500 and Nasdaq indices into a bear market and evaporated over 50% of the entire crypto market capitalization in just six months.
The Federal Reserve has already tightened monetary policy and made several interest rate hikes, which further caused damage to the crypto sector and had little to no effect on inflation. Experts are fearing such moves could easily cause recession, which may turn out to be a killer for volatile assets like Bitcoin.
“Markets keep expecting a peak in inflation, and keep getting disappointed,” David Donabedia, chief investment officer at CIBC Private Wealth noted.
“This likely means 75 basis point moves at both the July and September [Fed] meetings … There is nothing positive for markets in this report.” Donabedia added, stressing that Bitcoin and stocks have been moving in sync, despite the fact that cryptos should, in theory, trade as uncorrelated assets.
In contrast, crypto exchange Bitbank analyst Yuya Hasegawa thinks that Bitcoin’s downfall could be tamed because investors had been expecting a higher CPI number.
“The market has been pricing in high inflation numbers this week, so a downside for Bitcoin may be limited than previously expected. However, we cannot be too optimistic,” Hasegawa added.
Celsius files for bankruptcy
And while traditional finance caused enough damage to the crypto sector, the internal, industry-specific problems keep coming up. For instance, the troubled Celsius Network, which suffered from liquidity issues, finally filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
The filing comes after Celsius decided to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers.
“Without a pause, the acceleration of withdrawals would have allowed certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.” Celsius stated.
This is the right decision for our community and company - Celius’ CEO Alex Mashinsky said. “We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
Polygon to join Disney’s 2022 Accelerator Program
It’s not all bad news for the crypto sector, as Layer-2 scaling platform Polygon has been selected to partake in Disney’s 2022 Accelerator Program.
According to a press release from The Walt Disney Company on Wednesday, the accelerator program would be focused on NFTs, artificial intelligence, and augmented reality and Polygon would be one of the six projects to join.
Polygon CEO Ryan Watt emphasized that MATIC is “the only blockchain selected.” Shortly after the news, Polygon's native MATIC token spiked 25% to trade at $0,6421 as of press time.
Apart from Polygon, two other Web3 projects were selected this year as well – AR NFT discovery platform Flickplay, and Lockerverse, a Web3 storytelling platform that connects creators and brands.Bitcoin Cryptocurrency Crypto Market crypto market monitoring cryptocurrencies NFT Polygon