Crypto Companies BlockFi and Celsius Fall As Crypto Market Crashes21. Januar 2023
• Two high-profile companies, BlockFi and Celsius, combined crypto lending and crypto mining and are now bankrupt.
• The reasons for their downfall were the interconnection of the cryptocurrency industry and the incineration of hundreds of billions of dollars.
• This article explores the histories, downfalls and lessons of both organizations.
Cryptocurrency has taken the world by storm in the past few years, with its meteoric rise and subsequent fall leaving many investors in shock. Two companies that have suffered particularly badly due to the volatility in the cryptocurrency market are BlockFi and Celsius. Both companies had invested heavily in the cryptocurrency mining industry and had combined their crypto lending and mining operations in an attempt to make the most of the situation. However, the fall of the crypto market has resulted in the bankruptcy of both these companies.
BlockFi announced its mining operations back in May 2021, partnering with the mining giant Blockstream to manage its mining activities. The exact amount of hash rate managed by BlockFi is unknown, but it was clear that the company viewed mining as a complement to its financial services. Similarly, Celsius had spent $500 million on its mining efforts by November 2021, with its former CEO Alex Mashinsky claiming that the company had “created a unique mining business model”.
Unfortunately, the disastrous fallout of the past year has meant that both BlockFi and Celsius have been unable to survive. The crypto market has been extremely volatile, with hundreds of billions of dollars being lost in the process. This has meant that mining companies such as BlockFi and Celsius have suffered greatly, with their mining operations unable to make up for the losses they have incurred.
The failure of these two companies serves as a warning to all investors who are considering investing in cryptocurrency. The industry is highly interconnected, and a single bad decision can result in disaster. Investors should be aware of the risks associated with investing in cryptocurrency, and should only do so if they are prepared to accept the potential losses.
In addition, the failure of BlockFi and Celsius also serves as a reminder that the cryptocurrency market is highly unpredictable and is subject to the whims of the market. As such, investors should not become complacent and assume that their investments are safe. They should be prepared to take risks and be prepared to accept that their investments could be lost.
Ultimately, the failure of these two companies serves as a cautionary tale for all investors in the cryptocurrency market. While cryptocurrency is a potentially lucrative investment, it is also highly unpredictable and risky. As such, investors should be aware of the risks associated with investing in cryptocurrency and should only do so if they are prepared to accept the potential losses.