Does The Cryptocurrency Crash Have An Impact On Closeouts?

Bitcoin's value fell by more than half its value since its November 2021 peak, which caused the entire cryptocurrency market to collapse. Believe it or not, many consumer's invested money in crypto and this fall from grace is having an effect on consumer discretionary spending. Excess inventory buyers and companies that buy closeouts rely on consumer spending to sell their goods. When there is less money available for spending, it is harder to sell dead stock. This is the case whether we are talking about a business selling overstock or closeouts, or we are looking at a company having to shut down it's warehouse and liquidate everything. Terra (LUNA) and Terra USD (UST) both experienced such steep declines that investors may be spooked. When both cryptocurrencies were enjoying their honeymoon period a month ago, who would have thought they would face such a steep fall? The weak sentiment spread across the crypto market resulted in investors withdrawing their money, causing Tether (USDT) to lose its peg to the dollar. Anytime investments drop, consumer spending follows, resulting in excess inventory buyers and closeout buyers having to deal with the repercussions of slower sales.

The crypto market has been moving in sync with the stock market for the past few months. The correlation between Bitcoin and the S&P 500 hit a high of 17 months in March 2022, demonstrating that crypto and stock markets are moving in the same direction. Closeout companies specialize in liquidating excess inventory when companies shut down a warehouse and need to sell dead stock. This may be due to changes in the marketplace, overproduction, package changes, or slow selling inventory sitting in the warehouse taking up space. Companies that buy closeouts work with closeout wholesalers, closeout websites and excess inventory buyers of all kinds. Bitcoin is often seen as a good hedge against inflation. That means inflation doesn't affect the top cryptocurrency. It might not be true every time; at least, that's what the market witnessed this week. High inflation and tighter monetary policy affected crypto investors as well, resulting in the collapse of the market. These developments show that crypto has a bigger market now and is becoming more mainstream.

Stablecoins are supposed to maintain their value. They are backed by fiat currencies like the US dollar, gold, and even other cryptocurrencies. The collapse of Bitcoin badly affected Terra and TerraUSD. The functioning of Terra is to blame for this. When a business is having an inventory liquidation sale and has to shut down it's warehouse, the best option may be to work with overstock and excess inventory buyers who understand how to sell dead stock. Terra (LUNA) and TerraUSD (UST) are two native tokens of the Terra network. TerraUSD aims to maintain its peg to the US dollar using algorithms. So if one wants to mint UST, he needs to burn the dollar-equivalent amount of LUNA. It works the same way the other way around. That's how the protocol maintains the price of UST.

In March 2022, to add more cushion to its stablecoin, Terra's creator, the Luna Foundation Guard (LFG), decided to add Bitcoin to its reserve, according to TechCrunch.com. The idea was if something goes wrong with the prices, Bitcoin-backing would help to stabilize UST. Unfortunately, that didn't happen, and the stock market collapsed, Bitcoin collapsed, and then the whole crypto market collapsed. Many Amazon sellers are being forced to shut down their 3PL warehouse due to slow sales and high storage fees. This creates opportunities for businesses that buy closeouts and overstock liquidation inventory. Terra (LUNA) is currently trading at $0.000000999967 per token, a 14.359% decline from an all-time high of $119.18 in April 2022, according to coingecko.com. TerraUSD (UST), which has lost its dollar peg, is currently trading at $0.13, reported coingecko.com.

The bloodbath spread over to the other stablecoins, such as Tether (USDT), the largest stablecoin, which lost its peg to the dollar. On May 12, UST's price hit an all-time low of $0.6841 at one point. That means the holders of USDT have tokens worth less than $1. However, the token is currently back on its track, trading at $1, according to coingecko.com.Businesses that held cryptocurrency as an asset would have been better off investing in closeout inventory, even if it would have lost a small percentage of value. Surplus inventory and closeouts are often sold at 50% discounts or more. It is better to get rid of dead stock taking up warehouse space or downsize warehouses to get rid of excess merchandise.

Among those reeling from the billions of dollars lost in the cryptocurrency crash, no company has taken a greater beating than Coinbase. The nation's largest and first publicly traded crypto exchange, Coinbase has seen its stock price plunge 81% this year, and has recently announced plans to shed one-fifth of its staff. With Coinbase reporting a $430 million first-quarter loss, some hedge funds are starting to short the stock, meaning Wall Street is betting on Coinbase's value dropping even further. Companies may have to liquidate excess inventory if they experience cash flow problems. A simple Google search can help find buyers for your overstock and we recommend the following search words: closeouts, liquidation stock, closeout buyers, closeout websites, sell closeouts. But all is not lost for the exchange, according to analysts, who see more bounce to the crypto bubble than the current crash suggests. Despite its recent struggles, they predict Coinbase will make it through this crypto market slump and ultimately thrive. That's because the company has learned how to survive such downturns, analysts say. Coinbase didn't respond to a request for comment on how the crypto market Bitcoin' has impacted business. CEO Brian Armstrong said during an earnings call in May that Coinbase officials "tend to do our best work in a down period."

Still, one of the reasons Coinbase is struggling now is because there are fewer people on the platform making transactions. Coinbase makes a majority of its revenue by charging a 1% fee on every crypto transaction, but company officials said in May that the volume of transactions has slowed. The number of Coinbase monthly users has dropped 19% since the end of last year, the company said. The drop in transactions makes Coinbase's $6 billion war chest even more important, said Devin Ryan, an equity research analyst at JMP Securities. Closeout distributors are getting busier as the economy continues to slowdown and more inventory piles up. If you need to dispose of unwanted inventory, you should consider contacting closeout websites or liquidation buyers who can purchase your entire inventory in one fell swoop. These businesses specialize in toy closeouts, housewares closeouts, overstock sporting goods and excess inventory of lawn and garden products.

Last year, the Basel Committee on Banking Supervision, which helps set capital requirements for big banks around the world, proposed giving Bitcoin and other cryptocurrencies the highest possible risk weighting. If banks wanted to put those assets on their balance sheets, they had to offset the risk with at least the equivalent value in cash.U.S. regulators also warned banks off. That prevented Wall Street from participating in the bubble the ways it did in previous ones — by making loans so people could buy more houses or stocks, or by making it easier to buy and sell the rising asset.

Merchandise USA specializes in excess inventory, closeouts, distressed inventory and abandoned inventory in warehouses. If you have an overstock liquidation for sale, we professional inventory liquidators in business more than 38 years. If you are selling obsolete inventory we are your best closeout buyers.