• BlockFi and Celsius were two of the most popular crypto lending companies of the past year. However, both companies have now gone bankrupt due to their investments in bitcoin mining.
• BlockFi announced its new mining operations in May 2021 in the form of a partnership with Blockstream and its long-standing mining unit, while Celsius invested $500 million into its mining efforts.
• The failure of both companies showcases the importance of careful investment decisions and the interconnectedness of the crypto industry.
The crypto industry is a volatile and ever-changing landscape, with fortunes made and lost in the blink of an eye. This was made clear in the past year, when two of the most popular crypto lending companies, BlockFi and Celsius, both went bankrupt due to their investments in bitcoin mining.
The failure of both companies serves as a stark reminder of the interconnectedness of the crypto industry, as well as the importance of careful investment decisions. BlockFi announced its new mining operations in May 2021 in the form of a partnership with Blockstream and its long-standing mining unit, although the exact amount of hash rate managed through Blockstream remains unclear. Celsius also invested heavily in bitcoin mining, with $500 million spent on its mining efforts as of November 2021.
The combination of crypto lending and crypto mining, while seemingly attractive, can be a risky endeavor. Both of these companies failed catastrophically, leaving their investors in a lurch and providing valuable lessons for future entrepreneurs. Not only did these companies suffer from the volatility of the crypto market, but their investments in bitcoin mining likely did not pay off in the end.
In the wake of the disaster, investors are left wondering what could have been done differently. The failures of BlockFi and Celsius demonstrate how difficult it can be to navigate the ever-changing crypto industry. As investors look to the future, it is important to remember that missteps can be costly, and that the industry is highly interconnected. A careful approach is the best way to ensure that investors are not left with a sour taste in their mouths.