The buffet is open: Celsius and BlockFi – two large crypto financial service providers – are on the verge of bankruptcy in the wake of the current market crash. If you believe current media reports, Wall Street is already waiting in the wings to strike favorably in the crisis. For about two billion US dollars, Goldman Sachs wants to buy into Celsius at junk prices, should it come to bankruptcy. Hedge fund Morgan Creek has turned a blind eye to BlockFi for about $250 million.
Crypto and Wall Street, that has long been a David versus Goliath-style narrative, staged with the verve of a Shakespearean drama. The fronts were clear. Bankers are bad, crypto is good. And vice versa. Until 2020, Goldman Sachs did not miss an opportunity to brand Bitcoin as a worthless spinning for scammers. Then came the big boom of DeFi, NFTs and Co. in 2020 and thus the U-turn of the big banks.
Hundreds of millions for cryptocurrencies
Today, Goldman Sachs is cooperating with FTX and Coinbase, two of the largest crypto exchanges, offering Bitcoin as an investment and as part of a loan. CEO David Solomon presents himself as a big crypto bull. JPMorgan is setting up a 100-strong crypto team, betting big on the Metaverse. And the largest asset manager in the world, BlackRock, buys into the stablecoin USDC, the direct competitor of Tether, issued by Circle, for $ 400 million.
If you believe the crypto CEOs of this world, then the big banks blow to the counterrevolution in the crisis. “The sharks of Wall Street are now swimming in crypto waters,” the head of Celsius declared shortly after the crash of his token, still in May 2022. They have tried it at Tether, Maker and many other companies. It’s not just about us,” he said. “They are all looking for a weakness that they can exploit and destroy”.
Tether CEO Paolo Ardoino also feeds this conspiracy narrative on Twitter. Hedge funds had massively shelled his stablecoin after the crash of Luna, flanked by disinformation campaigns against the project, almost 16 million US dollars in reserves had to be paid out in a few days. “It really seemed to be a coordinated attack from the very beginning, with a new wave of FUD, troll armies, clowns and so on.”
I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse.
It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc. https://t.co/hhcsgHV1Ow
– Paolo Ardoino (@paoloardoino) June 27, 2022
But the simple truth could also be: Celsius and Co. have massively gambled with their offer of ever higher interest rates, have become greedy. The irony is unmistakable: the self-proclaimed saviors from the yoke of the banks must now be saved by themselves, by their own enemies.