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Tuesday, September 27, 2022

Although The 60% Year-To-Date Decline In BTC Is Alarming, Many Equities Have Fallen Considerably More.

Legacy investors frequently claim that the instability of BTC, ETH, and altcoins is too great to support a profitable investment. However, several significant firms have had far worse declines in their stock values this year.

Crypto critics have been quite critical of BTC and Ether’s (ETH) excruciating 60% and 66% price declines, respectively. This criticism may be well-deserved, but numerous companies have had comparable, if not worse performances.

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Several exchanges and processing pools are having liquidity concerns, big centralized yield and lending platforms are going bankrupt, Three Arrows Capital is going bankrupt, and the severe volatility in cryptocurrency values are all contributing factors.

2022 hasn’t been a great year for BTCs and other currencies, and sometimes even Tesla lost money in Q2 when it liquidated 75% of its BTC holdings. The announcement undoubtedly did not improve investors’ impression of the adoption of Bitcoin by businesses, even though the quasi-trillion-dollar corporation still has a $218 million holding.

BTC Rates Are Dropping Alarmingly, Can Drop Further: 

The impact of central banks’ removal of fiscal stimulus and rise in bond yields extends beyond cryptocurrencies. A small number of multi-billion dollar businesses worldwide have also been harmed, with loss that exceeds 85% in 2022 alone.

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Companies, particularly those publicly traded, rely on finance, whether the money is used for mergers and acquisitions or ongoing business functions. Because of this, debt-intensive industries like energy, vehicle sales, and technology are significantly impacted by central bank interest rate decisions.

Shares of Saipem (SPM.MI), an Italian company offering engineering and exploration services for projects involving oil and gas onshore and offshore, fell by 99.4% in 2022. In 2021, the firm suffered huge losses totaling more than one-third of its equity, and it urgently required funding to stay afloat as capital expenses rose along with rising interest rates.

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