Reasons bitcoin had its worst quarter in more than a decade

The world`s largest cryptocurrency lost about 58% of value in the second quarter of 2022 with other promising cryptos like Concordium, Axie Inifinity and the likes also being affected. Here are some flashpoints that hit the cryptocurrency industry last quarter.

The stock sell-off has weighed on bitcoin and the crypto market as investors dump risky assets. The first major episode last quarter was the collapse of the algorithmic stablecoin terraUSD and sister token luna which sent shockwaves through the industry.

A stablecoin is a type of cryptocurrency usually pegged to a real-world asset. The episode reverberated through the industry and had knock-on effects, most notably on cryptocurrency hedge funds Three Arrows Capital, which had exposure to terraUSD (more on this below. ) Crypto lender Celsius paused withdrawals for customers in June. The company offered users yields of more than 18% if they deposit cryptocurrency with Celsius. It then lent that money to players in the crypto market who were willing to pay a high interest rate to borrow the money. Celsius cited "extreme market conditions" as the reason for pausing withdrawals. The issues with Celsius exposed the weakness in many of the lending models used in the cryptocurrency industry that offered users high yields. Three Arrows Capital is one of the most prominent hedge funds focused on cryptocurrency investments. 3AC had exposure to the collapsed algorithmic stablecoin terraUSD and sister token luna. The Financial Times reported last month that U. S. -based crypto lenders BlockFi and Genesis liquidated some of 3AC's positions, citing people familiar with the matter.

Cryptocurrency exchange CoinFlex halted customer withdrawals last month, citing "extreme market conditions" and a customers account that went into negative equity. CoinFlex claimed that the customer, whom it alleges is high-profile crypto investor Roger Ver, owes the company $47 million. Ver, who has the nickname "Bitcoin Jesus" for his evangelical views of the industry in its early days, denies that he owes CoinFlex money. CoinFlex issued a new token called Recovery Value USD, or rvUSD, to raise the $47 million so it can resume withdrawals, and is offering a 20% interest rate for investors willing to buy and hold the digital coin. CoinFlex is also looking to recoup the funds from Ver.