- Cryptocurrencies fell along with tech and social media stocks Thursday as US after Facebook's shock earnings.
- Facebook parent Meta's shares lost 20% in premarket trading, hitting other risk assets.
Cryptocurrencies were down across the board on Thursday, as investors shunned technology, social media and metaverse-linked stocks after Facebook parent company Meta delivered weak fourth-quarter earnings and guidance that sent its shares plunging after hours.
Meta reported a loss in users for the first time in its history. To boot, its metaverse business racked up a $10 billion loss in the fourth-quarter of 2021, versus expectations for a profit of $3 billion.
Risk aversion and concern over the impact of rising interest rates and higher inflation has kept the entire cryptocurrency complex on a weak footing since the start of the year.
While Meta didn't break down expenses by segements, CFO David Wehner gave some more colour to the figures by explaning how hiring and a accelerated headcount in 2022 will be the biggest contributor to expensve growth, with the metaverse being one of these areas.
"You know, we're expecting accelerated headcount growth in 2022 to be the biggest contributor of expense growth, and that's largely in tech and product roles to support the seven product priorities that Mark laid out: Reels, community messaging, commerce, ads, privacy, AI, and the metaverse."
Metaverse-linked tokens, which were huge beneficiaries of Meta's pivot to the digital world late last year, took a hit on Thursday. Decentraland's native token, mana, was down 5.39% while rival metaverse platform The Sandbox saw its said token drop 10.60% over a 24-hour period.
The two have lost well over a fifth in value since the start of 2022, a far cry from the 300% gain both made in November, in the wake of Meta's announcement.
Elsewhere in the cryptocurrency market, solana fell back below $100 on Thursday after clawing back above this point earlier in the week. It was down 13.6% at $95, following a hack on a related network on Wednesday.
The Wormhole project tweeted on Wednesday that its site was down for maintenance while it looked into "a potential exploit." Wormhole is a bridge between the
"A cross chain bridge between ethereum and solana, called Wormhole Bridge, was exploited yesterday by an attacker, resulting in the loss of 120,000wETH tokens (equalling around $320 million)," Marcus Sotiriou, an analyst at GlobalBlock, said. "This is the second largest DeFi hack to date. The bridge allows users to send and receive
Last week, Chainalysis reported that DeFi platforms accounted for $900 million of the total money laundered in 2021, a 1,964$ year-over-year increase.
"Solana's cheap transaction costs reportedly encourage bots to spam servers and crowd out users who need to re-
margin underwater positions. Fresh fixes are pledged, but this is not the first time. Basically, it illustrates the current trade-offs between cost or speed and security, as well as the price of prioritising rapid ecosystem development," UBS strategists led by James Malcolm said.
Bitcoin meanwhile was last down 4.6% in the last 24 to around $36,742, while ether was down 5.3% at around $2,621, according to CoinMarketCap.