Celsius Froze Crypto Withdrawals: Here’s What It Means for Crypto

Are we tired of this yet? The crypto market has never been as disrupted as it has been by its own community. Celsius (another big bad crypto marketplace) froze crypto withdrawals because, frankly, it was insolvent. Voyager this week just filed for Bankruptcy. Now Coinbase is selling off all its information to ICE—a government organization—because it’s about to declare bankruptcy.

What does this all mean for crypto?

It’s Not a Pipe Dream, But It Could Have Been Too Early

You know, there was a company that tried to bring television to the internet. It was going to disrupt cable. But it did it too early. (This is famously a Mark Cuban fail, but really he was right, ultimately.) They tried to bring television to the internet before the internet had the bandwidth to support it. So, they crashed and burned.

We have Bitcoin, and it’s a great idea: a global decentralized currency. But if you were an early adopter like me, you remember that within a year of mainstream attention, the Blockchain was so large that no one could feasibly download it anymore. And then people keep losing thousands upon thousands of Bitcoin, worth thousands upon thousands of dollars.

So they start moving to marketplaces and exchanges. And the second they did that, it’s no longer decentralized. Now it’s in control of a few companies because the most popular companies are the ones that have the market share. And here we are.

The Perils of Deregulation

Deregulation is great when you aren’t getting taxed and no one can trace your money. The flip side to that is the scammers who stole your money also can’t be traced and aren’t getting taxed. Now, once crypto hit the Robinhood App and even Cash App, better controls started to be instituted.

But crypto marketplaces still aren’t banks. They aren’t controlled or regulated by anyone. And yes, they can just disappear with your money.

As Coinbase pointed out earlier in the year, the money in their coffers isn’t even technically yours. Their bankruptcy could have led to the dissolution of all the money held in their wallets.

So, we’ve got marketplaces that are in charge of your money and poised to disrupt crypto, and they can basically do whatever they want. They can take away that “buy/sell” button (like the Robinhood app did) at any time because they aren’t regulated. They aren’t a financial institution.

Now, that doesn’t actually mean they can commit fraud. They can’t promise to keep your money and then throw it away. But if you look at your Terms of Service, you will probably discover that they have a lot more rights to your crypto than you do.

Going Back to the Foundations

Of course, that doesn’t mean that crypto was a terrible idea, or that it can’t still disrupt global currency. Primarily, the issue is that early crypto technology has always been so unwieldy that there’s really no way to interface it except through a third party. These third parties strip away a lot of the benefits and protections related to crypto in exchange for ease of use.

So, to really disrupt the crypto market, we need to start using crypto more intelligently. Yes, crypto was made for engineers. But for actual adoption to really surface, it has to be usable by people who don’t have a computer science degree. You know, something like an easy-to-use mobile app.

As for now, here’s what you need to know about the crypto market: It’s bad. That’s not to say you shouldn’t fill your pockets with cheap coin, but the problem is that crypto is essentially a faith-based economy, and people are getting crushed. Now that people can’t really trust their marketplaces to actually give them their money, they are turning away from crypto en masse. That doesn’t mean you should listen to the panic on Reddit… but you should probably be a little more cautious with your yolos.