CoinMarketCap News, June 14: MicroStrategy and El Salvador Lick Wounds as Bear Market Bites
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CoinMarketCap News, June 14: MicroStrategy and El Salvador Lick Wounds as Bear Market Bites

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Created 5mo ago, last updated 5mo ago

Monday's mayhem has been nothing short of calamitous for MicroStrategy. The company is now nursing paper losses of $1 billion on its Bitcoin investment.

CoinMarketCap News, June 14: MicroStrategy and El Salvador Lick Wounds as Bear Market Bites

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BTC falls to $21,000 as S&P 500 enters bear market 🐻

Bitcoin slid to lows of $20,950 in the early hours of Tuesday morning — hours after the S&P 500 officially confirmed a bear market. Things went from bad to worse for the world's biggest cryptocurrency during Asia trading hours, when selloffs have been especially pronounced of late. All of this comes amid uncertainty about how the Federal Reserve plans to tackle runaway levels of inflation, with an increase of 75 basis points now seen as increasingly likely. While CoinMarketCap's data shows there's little to cheer about, BTC later rebounded… returning to $23,000.

El Salvador puts brave face on Bitcoin bet 👀

El Salvador is seeking to put a brave face on its controversial decision to adopt Bitcoin as legal tender. Finance minister Alejandro Zelaya has rejected claims that BTC's bear market could jeopardize the nation's fiscal health. Since September, when President Nayib Bukele's Bitcoin Law came into force, El Salvador has snapped up 2,301 BTC. Estimates in recent weeks have suggested that the value of this crypto has dwindled by $40 million — a figure likely exacerbated by the recent acceleration in selloffs. But dismissing critics, Zelaya said: "When they tell me that the fiscal risk for El Salvador because of Bitcoin is really high, the only thing I can do is smile. The fiscal risk is extremely minimal."

More crypto layoffs as bear market bites

BlockFi and Crypto.com have become the latest companies to confirm they're laying off staff. Confronted by a brutal bear market that shows no sign of slowing down, Kris Marszalek said Crypto.com was making the "difficult and necessary decision" to reduce its workforce by 5%. This means that the exchange will lose 260 staff members as it battles "to ensure continued and sustainable growth for the long term." In BlockFi's case, the company's headcount is going to be reduced by approximately 20% — with the executives warning this will impact "every team."

MicroStrategy's Bitcoin losses worsen 😱

Monday's mayhem has been nothing short of calamitous for MicroStrategy. The company is now nursing paper losses of $1 billion on its Bitcoin investment. And if BTC continues to slide below $21,000, it'll face a margin call on its BTC-collateralized loan with Silvergate Bank. CEO Michael Saylor is still as bullish as ever, tweeting: "In Bitcoin We Trust." But Wall Street feels differently, with his firm's share price tumbling by 22% at one point yesterday.

Second stage of bear market 'has begun' 😬

A crypto CEO says the second stage of the bear market has begun — warning: "This is where it gets ugly." Blockworks co-founder Jason Yanowitz said the euphoria from the bear market has now disappeared. Now, we're in "forced capitulation" mode, where prices keep falling — and painful layoffs begin. Painting a picture where top cryptocurrencies plunge by 90%, and by another 90% after that, he warned: "The lower prices go, the louder the bears get. The louder the bears, the lower the price goes. This creates a vicious cycle." According to Yanowitz, it's the third and final stage of the bear market that's toughest to survive: Bottomless Exhaustion. Unfortunately, this may be some way off yet.
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