Shares of crypto companies are collapsing before our eyes

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Millions of people around the world are watching their capital invested in cryptocurrency stocks evaporate into thin air.

Notable crypto companies that survived the massive stock selloff include MicroStrategy, Silvergate Capital, Marathon Digital Holdings, Coinbase, and Galaxy Digital Holdings.

Market analyst Caleb Franzen gave facts and figures, and also explained why the crypto market is on the verge of a severe bearish trend.

MicroStrategy shares have fallen 58% since the start of 2022 and are now 83% below their all-time high. Silver gate lost 42%, Marathon lost 64%, Coinbase lost 71% and Galaxy Digital lost 55%.

Share price MSTR: Caleb Franzen

These companies are closely associated with bitcoin and the crypto market in general. MicroStrategy is one of the largest bitcoin whales. A company that buys a large amount of cryptocurrency incurs large losses on its investments. Moreover, it faces huge expenses.

MicroStrategy will have a Bitcoin margin call at $21,000. Once this happens, the company will be forced to sell some of the cryptocurrency, as officials have already announced.

‎“We took out a loan with a loan-collateral ratio of 25%, a margin call will come when the asset price drops by 50%. So bitcoin needs to be halved of its purchase price, or around $21,000, before we have a margin call,” Fong Le, MicroStrategy CFO, said in the earnings report.

The correlation between cryptocurrencies and the stock market has become a concern for some analysts and investors. However, those in the market, including Sailor, are posting memes about it and saying that the future of digital assets looks great.

Will the crypto market recover quickly?

The fall of cryptocurrencies amid the collapse of the stock market prompted investors to make pessimistic forecasts. If the correlation is correct, then the value of cryptocurrencies is unlikely to recover in the near future.

The sell-offs have already led to serious consequences, including the depegging of stablecoins. The Luna Foundation Guard has spent $1.5 billion of its reserve to keep the UST stablecoin peg, but to no avail.

Enthusiasts do not despair. They consider this sell-off as a small obstacle on the way to new highs that are waiting for us soon.

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Source: Cryptocurrency

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