The volatility Music welcome to cnbcs crypto world im, mckenzie sagalos digital asset prices are falling again today by noon. Eastern bitcoin hovered at around twenty thousand dollars, ethereum dipped below eleven hundred dollars. Meanwhile, solana fell to thirty one dollars now, in the past six months, bitcoin has fallen 60 percent either well its down 73. Compare that to the s p, which has fallen 23 in the past six months, lets walk through how we got here. We started the week with crypto prices, plummeting bitcoin falling as much as 17. At one point, in the day it seemed like the crypto winter was definitely here. Most importantly, i asked every ceo offline. Do you have any bitcoin the word that kept coming back khan, its a con? I said how about nfts, i said well lets just you know. Cant conceivably even be asking about these. If im telling you that kryptos are con, i didnt mean a solo had any crypto. Now, in the chaos, a major crypto lending firm celsius halted, withdrawals and cited extreme market conditions as the reason why celsius, which managed more than 10 billion dollars in may, was known for offering high returns for customers were talking upwards of 18. Now those crazy high yields were what eventually came under scrutiny. I dont want to make a joke of it, because there a lot of the younger people and a lot of people borrow money. They will be gone today if theyre, not careful uh.

This is just shocking to people because, frankly, we dont know how many changes there are. I know when when i gary gansler made money, i was telling him. I was getting eight percent with my ethereum and he said well thats, basically too good to be true, jim and i think what hes really saying is youre about to lose a lot of money. So this risk certainly seems like its just kind of beginning uh. What i would say is on the decentralized side, so a lot of the d5 protocols. A lot of those positions are over collateralized, so you shouldnt quite see the underfunding situations that can happen with centralized borrower lenders. But that being said, you could still see a lot of liquidations with that collateral being sold off on d5 protocols, then, on tuesday crypto markets seemed to stabilize with bitcoin hovering at around 22 000 and ether. Around 1100 investors were assessing the fallout of celsius, and meanwhile another company made waves, coinbase announced that it was laying off nearly a fifth of its workforce due to crypto volatility. The company had previously cut spending and even rescinded job offers in the hopes of stabilizing its business. We had the recent inflation report that came out that i think surprised. Many folks weve had jamie dimon and others talk about an upcoming economic hurricane and so given whats happening in the economy. It feels like the most prudent thing to do. Right now. On wednesday morning, microstrategy ceo, michael saylor came on cnbcs airwaves to discuss concerns around his own company.

Microstrategy took out a 200 million dollar loan, backed by bitcoin in march. Now, as prices were, bitcoin tanked investors worried that the company would be asked to put up more collateral for its loan, but sailor said the fears were overblown. The margin call thing has much ado about nothing. Its just made me twitter famous. So i appreciate that and the twitter trolls love to beat up on me because it gets them engagement. We feel like we have a fortress balance sheet were comfortable and and the margin loan is well managed. Then that afternoon the federal reserve announced that it would raise interest rates by three quarters of a percent in an effort to curb sky high inflation. Crypto prices initially rallied on the news, as investors hoped that we could avoid a recession, but that rally well. It was short lived on thursday. We were back in the red. Bitcoin fell to around 20 000 at prices that it hadnt seen since the end of 2020.. The losses were closely tied to a sell off on wall street, which saw the dow fall 700 points to its lowest level in more than a year. Investors simply cant shake the fears of recession, and you know some say that it could take time for cryptocurrencies to recover from the sell off in riskier assets. Look, i think that were in a long drawdown period here. I think that weve taken the elevator down and i think that we as an industry are going to have to take the stairs back up and climb out by building real utility um.

You know, i think, that its a healthy washout in many ways. I think that you know one doesnt want to as a builder as an investor for the long term. Uh in any of these roles be in a market where its being driven by just short term price action by speculation. As lets be honest, the crypto market has been largely over the last couple of years. So now were here. Its friday and bitcoin is down 30 for the week ethereum well, its down 37. Some crypto hedge funds and businesses are facing growing questions about insolvency, but investors are still looking for quality crypto investments, its very unfortunate that there was a conflation of innovation and financial innovation, which i think is the real story here and instead we had financial instability because Of this opaque leverage, you just couldnt tell where all these risks were building up and really in some ways. This is just an age old story, youre borrowing short lending law, and i think its really unfortunate that people lost money and i think it will in some ways set back the space because you will lose some early adopters or some of the people who just came In new to the space, but i think, on the other hand, uh the fundamental technology here in the adoption curve that we see institutions that are coming in how you can get your financial system to operate the speed of the internet. Those are things that need to happen, so how are some of cryptos biggest fans weathering the crypto winter cnbcs kate, rooney traveled to the potential u.

s crypto capital miami to see how sentiment has changed? Crypto investors here in miami are now feeling the pain as prices go bust. Miami investors have been sobered by the price declines, but theres still this prevailing optimism. These people have really bet their careers on the industry, so most say theyre still in it. For the long haul they do tell me younger investors have really been caught on their heels and shocked at just how quickly the price of digital currencies and digital collectibles like the ones on this mural have come down. Then he moved here during the pandemic and a bull market. Miamis crypto bowl outside of miami dade college was one symbol of that hype. There was even miami coin: the citys namesake cryptocurrency now down about 95 trading at a fraction of a penny. Miamis mayor francis suarez, talked about it as a potential alternative to taxes. At one point he did say, while the project brought a 5 million dollar windfall to the city, its still a first generation technology, and that comes with some risks. These technologies are extremely new, and so you know theyre always speculative right, and so you know, one of the things ive always said is look. You should never invest money on something that you dont a believe in or b. You know there is a possibility. You can lose that money, so its got to be money that youre willing to sort of invest in that way.

Crypto has also taken the real estate market by storm in miami people are paying for luxury apartments in cryptocurrency, including these buildings, but crypto winter is putting a freeze on some of those deals about a month ago. Everything was on track. Lately things have slowed down what everyone says is: instead of watching and waiting for an apartment, they watch and wait for the market and then theres miamis nightlife 11. A club here that charges at least 50 000 for a table takes crypto and even minted its own nft. The club tells me theyre seeing a slow down, but it could be other factors like the slowdown were seeing in conference season. I havent quite seen it yet with our club um. You know we do have a high end sophisticated clientele, so we havent actually felt it. I do think in general. Obviously, you know the the worlds in a little bit of pain right now um. So i am seeing it im, not sure if it is going to gravitate to the high end nightlife or not. Yet i think it is too soon to tell theres also a sense of relief. When you talk to some investors, valuations are coming down, which can be a good thing for vcs. I sat down with chris adamo hes co, founder of flamingo capital and mentors a lot of the younger investors down here in miami. He also hosts a weekly tech and crypto startup. He says the industry overall has been waiting for a pullback.

People are worried about raising new rounds of money for sure, because people are going to tighten up a little bit and theyre. Probably values are lower, which are probably warranted in the first place. It was getting a little too high for the last few months as far as like valuations go, but the build has been building all this time that i know are theyre excited to build now in a market thats, probably more in line with what they should have Ex for excitations, this downturn has flushed out a lot of the leverage in the system we saw that happen with luna and tara and then celsius. So some of the riskier interest bearing projects are falling apart right now. One thing that might surprise people the industry here now wants regulation talks about it a lot and they say its now needed for investors to feel safe again, holding their money in crypto, okay, thats all for crypto world this week. But you can find that story and more over at cnbc.

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