Ari Paul, founder of blockchain investment firm Blocktower Capital, weighed in on the bear market. Comparing the situation with the fall of technology stocks in 2000. Paul compares Bitcoin to Amazon, which is one of the companies that survived the market collapse.
In a Twitter thread, Paul pointed out that although there are “modest” products in the cryptocurrency market, many improvements have to be made to become mainstream. Paul also argues that adoption is “5 years behind” what many expected.
The executive also highlighted the network crashes in Solana, the delays in scaling Ethereum and the security of Bitcoin. So, like future updates that are overlooked during bull runs, but “feels very different” during a bear market. Arguing that optimism no longer serves in this situation.
Paul then compared the current cryptocurrency market to the Nasdaq market in the year 2000, saying that most cryptocurrencies are risky and in an early phase. However, the founder of Blocktower stressed that there will be something like “Amazon” that will survive the fall. He thinks that could be Bitcoin.
Fed announces biggest interest rate hike in 28 years
The Federal Reserve on Wednesday raised interest rates by 75 basis points, or three-quarters of a percentage point, marking the biggest increase in 28 years. In an ongoing effort to reduce the skyrocketing inflation that has hit the economy along with the stock and bond markets to cryptocurrencies.
The US central bank also announce that it would continue to reduce the size of its balance sheet at the pace announced in May. According to a statement from the Federal Open Market Committee (FOMC).
The federal funds rate will be in a range between 1.5% and 1.75%, according to the Fed. By the end of the year it is expected to be around 3.5%. Which implies an unusually fast and tough pace of monetary tightening, according to Goldman Sachs.
Cryptocurrency exchange Coinbase cuts headcount by 18% amid bear market
Coinbase CEO Brian Armstrong has announce he announced on Tuesday that he has made the “difficult decision” to reduce the size of the Coinbase team by approximately 18% due to the economic recession that is beginning.
“It seems that we are entering a recession after an economic boom of more than 10 years. A recession could lead to another crypto winter, and it could last for an extended period,” Armstrong wrote. He added that trading revenue declined significantly during the past crypto winters, noting that Coinbase has survived through four major crypto winters since its founding in 2012.
Armstrong emphasized that the firm has been growing “too fast,” with Coinbase’s headcount reaching 1,250 employees at the beginning of 2021. According to the CEO, the team has grown four times in the last 18 months and its employee costs are “too high to effectively manage this uncertain market”.
According to the announcement, all departing employees will receive support in finding a new role, including a minimum of 14 weeks of severance pay, as well as an additional 2 weeks for each year of employment beyond 1 year. The additional support includes four months of health insurance in the United States and four months of mental health support globally.
MicroStrategy CEO: Bitcoin and Lightning Network can save DeFi from adversity
In light of the recent fragility in the decentralized finance (DeFi) sector, Bitcoin (BTC) maximalist and MicroStrategy CEO Michael Saylor believes that Bitcoin and the Lightning Network can come to the rescue of the DeFi market.
With two huge protocols, Terra and Celsius, facing serious difficulties, the DeFi sector is going through a difficult time. And in a recent tweet, Saylor suggested that Bitcoin and Lightning could help stabilize the sector.
According to Saylor, Bitcoin provides a “solid ethical, economic and technical foundation for DeFi.” He went on to say that the Lightning protocol and the BTC token will be used to build the next generation of DeFi.
Saylor was responding to a Bloomberg report on Tuesday, which highlighted numerous key concerns in the DeFi arena.