Crypto Just Had One of Its Worst Days in History. Here's What You Need to Know

The bear market and crypto winter take no prisoners, as crypto companies across the board face major struggles. 

It's no secret the crypto market is taking a hit so far in 2022. This week, liquidations reached record highs. According to Coinglass, over $778 million has been liquidated in just 24 hours. This may be a snowball effect of two of the largest cryptocurrencies, Bitcoin and Ethereum, dropping significantly. Starting with the largest, Bitcoin is down over 11% this week. While many cryptos saw highs in October and November 2021, many are experiencing new lows this month. BTC is one that in November 2021 saw its all-time high of almost $69,000, but is now trading at just over $22,000, down nearly 70%. 

Ethereum is another crypto that has dropped 15% this week. According to CoinMarketCap, its current price is $1,222 at the time of writing; a low the coin hasn't seen since December 2020. Like BTC, Ethereum also hit its all-time high in November 2021 at $4,891.70. Today's price reflects a 75% drop in value for the popular currency. 

Of course, when two of the largest cryptocurrencies see such massive losses, the entire market is affected. Solana (SOL), Avalanche (AVAX), Polkadot (DOT), and Cardano (ADA) are among others that have seen double-digit losses already this week. 

Huge layoffs from major companies

To add insult to injury, many blockchain tech companies are having to lay off employees. Coinbase, one of the largest and most well-known American cryptocurrency exchange platforms, has had to lay off 18% of its full-time employees. With a team of around 5,000, it is looking at laying off around 1,100 employees. 

Brian Armstrong, CEO of Coinbase, believes the company grew quickly during a bull market, but now that the bear market is here, cuts have to be made to continue to function. He said, "We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period…While it's hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment."

Withdrawal freezes

In other cryptocurrency news, Celsius Network, one of the largest crypto lenders, had to freeze all withdrawals and transfers due to the extreme market conditions. "We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations," said the company. 

Although bear markets are a natural part of the life cycle of any large financial economy, it certainly is unnerving to see such extreme losses.