In principle, computers only know this: 0 or 1. There are no negative values for them, minus signs are something for humans. For example, people who invest their money in cryptocurrencies such as Bitcoin, Ether or Cardano. Or in crypto exchanges and neo-banks.
Digital, decentralized money actually wants to be an alternative to the classic financial market. Without the influence of banks or governments, transparent and democratic. The value should be found in the free play of the market and every transaction should be recorded in a blockchain database that cannot be forged. The big promise: Especially when the financial system goes into crisis, crypto should be the salvation. But crypto prices have been falling for months – precisely because of the growing uncertainty on the financial markets, high inflation and significantly higher interest rates again. The highs of last autumn are now a long way off. The key crypto currency Bitcoin, for example, has lost almost two-thirds of its value since then.
In the meantime, the crash has also had consequences on the classic financial markets. The US crypto exchange Coinbase reports a loss of 1.1 billion dollars in just three months. “The current downturn has been rapid and stormy,” Coinbase said. A year ago they had made a profit of 1.6 billion dollars.
Coinbase’s business model relies heavily on trading fees, making it vulnerable to price fluctuations. Both the number of users and the trading volume fell, and sales fell by more than 60 percent to just over 808 million dollars. Added to this were high depreciation. Since hitting a record high last November, Coinbase stock has lost about three-quarters of its value.
Nuri files for bankruptcy
The Berlin digital bank Nuri was hit even harder: it is bankrupt. On Tuesday, an application for insolvency was filed with the responsible district court in order to “ensure the continued operation of the app and the fulfillment of Nuri’s liabilities,” according to the company, which was called Bitwala until last year.
The turbulence on the crypto market was also fatal for Nuri. As early as mid-June, an important business partner of Berliners, the US fintech Celsius Network, had frozen the funds of all its customers. It is now bankrupt. Celsius specialized in cryptocurrency loans, while the necessary digital currencies were borrowed from Nuri, among others. According to media reports, the entanglements may also have made the search for new investors more difficult.
For the time being, the insolvency should have no effect on customers, it said. They would still have access to their deposits and they could withdraw in full at any time. Nuri does not have its own banking license but uses the services of the Solaris Bank. According to Bloomberg, it confirmed that the bankruptcy would not affect the assets of Nuri customers in euro bank accounts or in crypto wallets. According to the fintech, it has around 500,000 customers and most recently managed assets of around 325 million euros.