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BARSTOOL FINANCE: Crypto winter is coming

Can someone check in on El Salvador? You might remember that the Central American country went all in on bitcoin, becoming the first country to make it legal tender in September of 2021. This is the stuff coups are made of in 2022.

Giphy Images.

Whether you live in a Third World country or not, it’s been a bad year to have laser eyes in your profile pic. Bitcoin is down more than 50% this year alone. And it’s currently flirting with dropping below $20k.

(Source: Google Finance)

As a reminder, it was trading at around $69k in November (it's all time high), meaning there were a lot of idiots convinced by their weird cousin at Thanksgiving to risk it all. For what it’s worth, Matt Damon is at least partially to blame for convincing the American populace that “fortune favors the brave.”

There is a laundry list of reasons crypto, and more specifically, bitcoin is tumbling, so spare me the “well, ackchyually…” while I oversimplify things…

We’re in a risk off environment thanks, in large part, to rising interest rates courtesy of the Fed. And it turns out a super-volatile digital currency created in 2009 by an anonymous dude (or group) called Satoshi Nakamoto falls into the “risky investment” category.

In fact, this year bitcoin's fall from grace has closely resembled that of tech stocks and other high risk-high reward assets.

And, unsurprisingly, as crypto autumn fades to crypto winter, the crypto ecosystem propped up by fat stacks of fiat currency has begun to crumble.

Celsius, a massive crypto lender, froze users' assets last week (on the plus side, you can’t sell at a huge loss) and hired “restructuring” lawyers yesterday. Turns out offering 18.63% interest rates on crypto deposits isn’t a sustainable business model.

And companies are starting to thin the herd…

Last week, the Winklevii (who may have officially ended 'Don’t Stop Believin’s' run as the greatest cover song of all time) laid off 10% of employees at Gemini, their crypto exchange.

KFC gave this the One Minute Man treatment…

And yesterday, big swinging dick, Coinbase, announced it was laying off 20% of its workforce, citing fears of recession. At the beginning of this year the company had said it planned to hire 2k engineers and other virgins.

Next up: Crypto.com selling the rights to the former Staples Center to ExxonMobil for pennies on the dollar.

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