July has been one of the most complex months regarding the closure, freezing, and declaration of Bankruptcy of companies that have operated with BitIQ Multiple events accompany the fall of Bitcoin and various traditional financial assets. Still, inflation is undoubtedly the one that has caused the most devastating effects so far this year.
The relevant falls that cryptocurrencies have had are causing many platforms dedicated to the crypto investment and decentralized finance sector to give their last breaths because they have been dedicated to marketing this digital financial product. Still, they have been able to handle the crisis they are going through.
The users of these platforms are significantly affected since their funds are either waiting for a change in trend or have been lost after the fall of Bitcoin.
This time it was Celsius Network Ltd., one of the cryptocurrency lending companies that among its creditors would have around 100,000 users, considered one of the most important protocols in the crypto ecosystem, preferred to adhere to Article 11 of the United States bankruptcy.
Causes that lead to account freezing
The renowned cryptographic exchange and lending platform have made it clear that the marked downward trend that Bitcoin has been experiencing has not contributed to the company’s operation since its commitments to third parties are more than the assets it owns.
Although this bankruptcy situation to which the company adheres establishes that it will be in a restructuring phase to improve its services and benefits, they nevertheless recognize that they have the necessary capital to cover urgent and last-minute needs.
After the continuous inflation, it was against a rock. A hard place, and that is why these could be considered the main causes that led to a drastic decision that affected the almost 1.7 million users that it has in its client portfolio.
On the other hand, they cannot be left aside; the increase in interest rates has contributed to investors preferring to stay out of crypto investments, in turn, the collapse of hedge funds.
Consequences of the Bankruptcy of crypto platforms
The reaction of users and the crypto ecosystem to this decision could be illogical. Still, it was an action that was digested calmly and calmly in the market, where the impact was less since the shares remained down.
After the fall of Terra, many cryptographic lending platforms, such as Celsius, began to take measures progressively in favor of their millions of users; in June, they froze the accounts and declared Bankruptcy.
We could be facing a global transformation of the crypto environment, where perhaps decentralized finances and the various applications based on them could respond to new needs of the digital financial market and ensure new crypto investment projects.
Finance experts often issue opinions that can destabilize the market. Still, users themselves are the ones who have decided to receive this type of action as a response to the frustrating fall of Bitcoin and other cryptocurrencies.
An action that could unbalance the market
When we hear the word Bankruptcy, without a doubt, we imagine the worst and more in such a hit financial investment scenario; it is not only cryptocurrencies but also technology and even large companies that have assets on the stock market.
A decision that is no secret to anyone affects a market that has been vulnerable since the beginning of the year, where it has values ranging from 1,000 to 10 million dollars in loans to third parties in cryptocurrencies.
The most significant impact has been suffered by its users as well as the employees of the other crypto companies that have decided to reduce operations.
To date, cryptocurrency investors usually indicate that the situation that digital currencies are going through is the result of several restrictive measures in the traditional market and that, unfortunately, has affected the digital market.
They do not expect this situation to change until the inflationary crisis ceases; more than the closure of crypto companies, the global world situation is affecting the valuation of Bitcoin and other crypto projects.
Conclusion
Although it sounds intense, we could be facing an economic crisis or world recession in which this type of action will not stop occurring; it is, therefore, advisable to prepare for future changes and perhaps a tightening of inflation control policies; crypto investments do not escape being an option, enter Bitcoin-Prime trading system