Chain reaction

When the going gets tough, the tough get going – this truism is currently proving true in a negative sense: the crypto market is down, inflation is rising and everyone is afraid of a new recession. In addition, there are temporary payout problems at the world’s largest crypto exchange Binance and frozen accounts at Celsius, which recently triggered another crash. The bitcoin price has rattled into the basement, miners are stopping their work for profitability reasons and are throwing their BTC stocks, including hardware, onto the market.

The Bitcoin imbalance is now becoming a problem for companies like MicroStrategy: about 2 years ago, the software company started investing every spare cent in Bitcoin. Around 129,000 BTC are now on the balance sheet – at the current exchange rate around 22k dollars, this corresponds to a value of around 2.84 billion dollars – but MicroStrategy has paid almost four billion dollars for it. Even MicroStrategy CEO Michael Saylor’s attempts at appeasement via Twitter are of little help – the share price still plummeted by 30 per cent in mid-June.

Speaking of June: The next quarterly report is due at the end of June – and there is the threat of a hefty write-off on the Bitcoin losses; but one is in good company, because Tesla, Block and all other companies that own cryptos also have to write off losses. Shareholders don’t like that at all and in the current, tense situation, nervous reactions and downward price movements are to be expected.

Job cuttings

Like a tsunami, a wave of layoffs is sweeping the industry: Coinbase is preparing for an impending crypto winter, including recession, by cutting its workforce. 900 jobs will be cut. CEO Brian Armstrong explained that Coinbase had grown “too fast” in the last bull market. While this is understandable, it will certainly not boost the share price.

Vienna-based Bitpanda (named a unicorn only last year) is also laying off a quarter of its workforce. This is in response to “rising inflation due to geopolitical tensions and concerns about an impending recession”, write Bitpanda founders Eric Demuth, Paul Klanschek and Christian Trummer.

Whale sighting

While some companies look badly battered, the whale population is surging at the moment: the number of large-scale Bitcoin investors, also known as whales, has increased significantly in recent weeks – according to blockchain analysts Glassnode, the number of Bitcoin investors holding over 10,000 Bitcoin has risen from 80 to over 100 from October to now.

As we have already noted, now is the time for future big players to lay the groundwork for their success. Those who can use this crisis to their advantage will be able to fully benefit in the next peak phase from the fact that some competitors have run out of breath early…

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