Why Crypto Currency is damping?

 

What decision has dealt a big blow to the bitcoin and why is the cryptocurrency sliding so quickly?

“Make money by purchasing, borrowing, or exchanging cryptocurrencies.”

A platform called Celsius, which is regarded as a prominent participant in the area of digital money, offers these services to its users.

However, last Sunday, the business made the decision to freeze the accounts of 1.7 million consumers in light of the state of the market.

The decision, which cryptocurrency specialists have dubbed "Correlato," started a downward trend in the prices of the two most important currencies, bitcoin and etherium, which has persisted ever since.

Verito is a phrase that is frequently used to describe financial decisions made when money is accessible but cannot be spent. Argentina's move to restrict bank withdrawals in 2001 marked the beginning of the trend.

The cryptocurrency market was unstable early this year, according to Ellis Liu, a senior associate at Wisdom Tree Firm, because of rising interest rates, inflation, and a decline in international markets.

It should be noted that although the price of etherium has dropped by more than 60%, the price of bitcoin has only declined by roughly 50%.

According to experts, this has hurt other digital currencies and decreased their value, making it challenging to use other cryptocurrency platforms.

What happened?

Celsius's own digital currency, the CEL, began to decline on Sunday, and here is where the problem began.

As the value of CEL fell, Celsius decided to place a restriction on consumers, prohibiting them from withdrawing, transferring, or converting cryptocurrencies from their accounts.

The company did not say how long the facilities had been shuttered.

Celsius's decision also had an impact on Binance, the world's largest cryptocurrency exchange platform, forcing it to temporarily halt bitcoin issuance.

The decision to freeze the account was made for the benefit of consumers, according to Celsius, which has offices in the United States, the United Kingdom, and Lithuania, so that efforts may be done to preserve their funds.

It should be highlighted that the value of Celsius company's currency has decreased from seven US dollars to zero point twenty dollars in just one year.

The Celsius system pays out high interest rates to users who maintain their bitcoins in the network.

Why there’s no security?

It's similar to putting money into a savings account at a bank. The main difference is that, unlike the financial system, the digital world has no legal protection.

According to Celsius's website, the business pays 7% interest on currencies including USDC and Tether, 7.5% on polygon, 6% on etherium, and 6.5% on bitcoin.

No regular bank in the world can provide such a profit given market circumstances and interest rates.

Celsius has confirmed that consumers would continue to get incentives while their accounts are locked as a result of the recent decision.

Following these incidents, Gary Jensler, chairman of the SEC, America's top economic regulator, has issued a warning against making profiteering claims that are unlikely to come true.

"How can somebody offer such a profit in today's society without providing sufficient information?" He inquired.

Earlier in March, three European economic agencies advised consumers that trading cryptocurrencies posed dangers and that using them as an investment or transaction would not benefit the majority of people.

Despite these claims, Sam Theodore, a senior consultant at Scope Group, believes that "the cryptocurrency craze is not going away anytime soon." Purchasing currency.

"Unfortunately, no statistics exist on how many of these investors understand how bitcoin works or how many hazards exist," he added.

According to Paul Donovan, chief economist at UBS, the fall of the cryptocurrency market has little impact on the actual economy.

 

"Corruption is falling once again," he claims. Does it make a difference? no. Corruption is a risk, not a wise investment. The economy will only profit if the cryptocurrency's resources are put to good use.

What do you think about it?