Easy Money Makes Easy Markets, Until The Party Stops Today

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This is an opinion editorial by Adam Taha, a host of a Bitcoin podcast in Arabic and a contributor at Bitcoin Magazine.

Luna’s infamous collapse was followed by an implosion at Celsius, then suddenly Tron showed hints of demise and now Three Arrows Capital is in deep financial trouble. No one knows who’s next, but one thing is certain: more pain is coming. Current market conditions are revealing capital and technological problems in the cryptocurrency world. Things are not good in the Web3-hood.

What about bitcoin? For the sake of clarity, bitcoin is not crypto. It’s important to distinguish between the two. When I say “crypto,” I’m referring to digital products and innovations that rely on using blockchain technologies to run their projects. As of this writing there are 19,939 cryptocurrency projects out there, most of which appeared in the last 12 months. Why are many of these companies struggling now? How are they failing at a relatively similar time? Are all these projects and companies scams? Did the Federal Reserve cause this? The answer is simply, no. As I said, the market did not cause problems in Web3 and crypto projects, the market simply revealed the rot underneath. The problem is a liquidity problem and not necessarily a technical one. We witnessed a “gold” rush in the most recent market run-up from fall 2020 to spring 2022. That euphoric rush to market meant higher competition. Higher competition created an environment where two things emerged:


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