Market Wrap: Bitcoin Heads for Worst Week in Year

Hi and welcome to Market Wrap! This is a limited edition since the team is off today as CoinDesk observes Juneteenth as a company holiday. We will be back Tuesday, June 21st.

Bitcoin (BTC) has tumbled 23% since Sunday, heading for its worst weekly performance since May 2021. As of press time the largest cryptocurrency was changing hands just around $20,500. The price has declined 56% year-to-date.

For the latest cryptocurrency prices, please go here, and for the latest news headlines, please go here.

In the meantime, check out these crypto market stories from this week:

• Biggest ‘stETH’ Pool Almost Empty, Complicating Exit for Would-Be Sellers: A trading pool that large institutional investors such as Alameda Research and Three Arrows Capital have used to dump their “stETH” tokens is now nearly drained and heavily imbalanced, potentially trapping retail investors as well as the embattled crypto lender Celsius.
• How Crypto Lender Celsius Overheated: Celsius rapidly became more brazen in its attempts to generate yields, using decentralized lending protocols and aggregators to juggle around client funds for the best return.
• Federal Reserve Board: Recent Market Turmoil Shows ‘Structural Fragilities’ of Crypto: The report is a preview of Fed chair Jerome Powell’s testimony in Congress next week.
• FUD or Facts? Terra, Celsius Show Value of Asking Questions: Kicking the tires on crypto projects and holding people accountable for flaws within them is how the industry will improve and grow.
• Lido Finance Warns Leverage Is a ‘Hell of a Drug’: After integrating with DeFi major Aave, Lido saw leverage kick up a gear and nudged some larger players to unwind. But plenty of people didn’t.
• Genesis Trading Mitigated Losses With a ‘Large Counterparty,’ CEO Says: Genesis’ update comes after crypto fund Three Arrows Capital confirmed heavy losses during the market rout.
• Babel Finance Suspends Withdrawals, Citing ‘Unusual Liquidity Pressures’: Babel Finance has responded to a market downturn by temporarily freezing withdrawals and redemptions.
• Three Arrows Capital Confirms Heavy Losses From LUNA’s Collapse, Exploring Potential Options: Report: The company’s co-founder said it’s looking into the possibility of asset sales and a rescue by another firm.
• Wallet That Helped Trigger UST Implosion Linked by Analysis Firm to Terra Developer: The popular decentralized stablecoin lost its dollar peg and fell to pennies in May. A South Korean blockchain analysis firm suggests the death spiral was sparked by transactions from a wallet linked to the lead Terra developer – though any motivation or rationale remains a mystery.
• Fed Announces Biggest Rate Hike in 28 Years: “The labor market is extremely tight, and inflation is much too high,” said Chair Jerome Powell.
• Coinbase Lays Off Around 1,100 Employees: The exchange is reducing its workforce by roughly 18%. CEO Brian Armstrong admits the company “grew too quickly.”
• Kevin O’Leary Says ‘Panic Event’ Is Needed Before Crypto Bottoms: The strategic investor spoke to CoinDesk ahead of crypto marketplace WonderFi’s move to the Toronto Stock Exchange.
• MicroStrategy Defended at BTIG; Saylor Not Expecting Imminent Margin Call: Shares of the technology company have tumbled alongside bitcoin, down 35% over the past few days and nearly 75% so far this year.
• Binance, Kraken and Polygon Accelerate Hiring in Response to Industry-Wide Job Cuts: Coinbase, BlockFi and Crypto.com are among the crypto-related companies announcing layoffs this week.
• Celsius Troubles, UST Collapse May Help Crypto Long Term, FSInsight Says: The firm sees good buying opportunity now for bitcoin.
• With Market Crash, El Salvador Is Down $52M on Its Bitcoin Bet: The country has made $104 million in investments in the cryptocurrency since it made bitcoin legal tender last September.