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Home BUSINESS

Another Crypto Company Blockwater Has Landed In Hot Waters, Leaves More Room For Questions On The Blockchain Industry

BlockNews Team by BlockNews Team
October 14, 2022
in BUSINESS, CRYPTO, MEDIA
Reading Time: 3 mins read
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Blockwater, a crypto lending company, recently got into hot water when it defaulted on a DeFi loan. The default three days ago between the South-Korea-based investment company and a DeFi company, TrueFi, came with a claim that TrueFi had given Blockwater a notice after defaulting on a $3.4 million loan supposed to be in BUSD stablecoin.

Blockwater’s failure to get the loan to True is another testament to the recent happenings in cryptocurrency, as there had been a dramatic downtime for most of the year. Alongside the collapse of the Terra blockchain, there have been other prime examples of how bad the bearish market is and how much the investment space, in general, is suffering.

Many well-known crypto companies have been forced to file for bankruptcy following all the major crashes in crypto. Companies like the crypto lending Celsius network, Hedge fund Three Arrows Capital (3AC), and even digital assets broke Voyager Digital has filed for bankruptcy. After a loan restructuring and payment extension in August between DeFi company True-Fi and Blockwater Technologies, Blockwater again defaulted on its obligation to pay back the loan. They could only pay $654,000 out of the remainder of its loan, even after the restructuring, and yet still missed a payment, with the debt left to refund amounting to $3 million.

However, with the recent happenings, it is expected that Blockwater is facing considerable downtime.

The Bearish Market Trend

Bear markets are known to occur when the prices in a market are in a decline of more than 20%, which is often accompanied by negative sentiments from investors and a decline in economic prospects.

Bear markets could either be a cyclical or long-term occurrence.

The recent bearish trend in crypto started in the year’s second half and has worsened, especially with inflation taking a toll on the investment market. Big coins like Bitcoin and Ethereum have taken significant hits due to this trend, and with a big company like Blockwater going through bankruptcy, it leaves more room for wondering how bad the market has gotten.

As big crypto companies continue to go through tough times and eventually get forced to pull out of the market, it breeds a culture of fear for individuals in the crypto markets, and it may cause them to flee with what is left of their investments.

Could It Get Better?

The bearish trend is not new in the market, and it may be experiencing this terrible price shift, especially compared to how well it was doing around the end of last year and the first quarter of this year. With Bitcoin recording its highest price and Ethereum predicted to go even higher than it started the year, the shift may have been a shock to many. There is a high chance that the market will improve as crypto is naturally volatile. Still, it has become more apparent with the inflation that has hit the stock market that this may have been long coming.

Things have gotten more expensive, especially after the pandemic, which is also a key contributor to the current inflation. However, crypto has experienced downtimes before, and it’ll certainly bounce back from this, with a chance of recording higher prices. Still, it is also inevitable that companies will file for bankruptcy, and thousands will make their way out as the market is currently inadequate.

The pandemic played a massive role in the downtime the crypto market is currently experiencing, as people pulled out many of their investments to survive during the shutdown. The market is now feeling the aftermath of months of panic and uncertainty.

There have also been wars like that of Ukraine plaguing countries. And that has also contributed heavily to the investment markets’ bearish trend.

The recent happenings of companies like Celsius and now Blockwater leaves more room for questions on what will become of the crypto space as the year ends; it has suffered crash after crash for most of the year.

Conclusion

Blockwater is not the first crypto company to shut down; unfortunately, it may not be the last. If the bearish market continues, we may continue to see more stories like this, but crypto will undoubtedly bounce back eventually.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.
Tags: Blockwatercryptolending
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