Bankruptcy Filings Soar in 2023: Is a Financial Crisis Looming?
The post Bankruptcy Filings Soar in 2023: Is a Financial Crisis Looming? appeared first on Coinpedia Fintech News
Whalechart, a prominent voice in the cryptocurrency space, took to Twitter recently to warn that bankruptcy filings have surged to “dangerous levels,” comparable to the Great Recession of 2008 and the COVID-19 pandemic of 2020. Interestingly, a recent report by Cornerstone Research revealed a drastic uptick in large corporate bankruptcies during the first half of 2023.
— Whale (@WhaleChart) September 24, 2023
BANKRUPTCY FILINGS SURGE TO DANGEROUS LEVELS
Bankruptcy filings have recently reached levels on par with the Great Recession in 2008 and the 2020 COVID-19 pandemic.
This indicator often suggests that the economy isn't performing well, and has historically always been… pic.twitter.com/CJKQnTRhTc
More Bankruptcies, Lower Assets
According to Cornerstone Research, 72 bankruptcy filings by public and private companies boasted over $100 million in assets during the first half of 2023. This figure already eclipses the 53 filings for the whole of 2022. Even more concerning is that the average assets at the time of these filings—$780 million—fall significantly below the 2022 average of $1.62 billion and the 2005-2022 average of $2.05 billion.
The sectors most affected by this bankruptcy wave are manufacturing, retail trade, and services. Manufacturing alone accounted for 33% of all bankruptcies filed in the first half of 2023, with 24 filings compared to just 13 the previous year.
As crypto lending companies and exchanges find themselves in the bankruptcy fray, it’s a clear sign that no industry is truly isolated from economic distress.
It’s not just the number of bankruptcies that’s alarming, but also their magnitude. The first half of 2023 saw as many ‘mega bankruptcies’—those filed by companies with over $1 billion in reported assets—as all of 2022. SVB Financial Group tops this list, declaring bankruptcy with $19.68 billion in assets, followed by retail giant Bed Bath & Beyond Inc. with $4.40 billion. Notably, six mega bankruptcies emerged from the services industry, reflecting its heightened vulnerability.
The Crypto Angle
While the cryptocurrency market is no stranger to volatility, these bankruptcies might indicate that the traditional financial system’s challenges are seeping into decentralized finance, warranting further scrutiny.
As Whalechart’s tweet suggests, these indicators usually signal imminent economic downturns, often succeeded by colossal stock market crashes. With the alarming bankruptcy stats in hand, both individual investors and corporate strategists would do well to reevaluate their financial game plans.
Whether you’re invested in blue chips, crypto, or emerging markets, the message is loud and clear: caution is the watchword as we navigate the financial waters of 2023.
Bankruptcy Filings Soar in 2023: Is a Financial Crisis Looming?
The post Bankruptcy Filings Soar in 2023: Is a Financial Crisis Looming? appeared first on Coinpedia Fintech News
Whalechart, a prominent voice in the cryptocurrency space, took to Twitter recently to warn that bankruptcy filings have surged to “dangerous levels,” comparable to the Great Recession of 2008 and the COVID-19 pandemic of 2020. Interestingly, a recent report by Cornerstone Research revealed a drastic uptick in large corporate bankruptcies during the first half of 2023.
— Whale (@WhaleChart) September 24, 2023
Bankruptcy filings have recently reached levels on par with the Great Recession in 2008 and the 2020 COVID-19 pandemic.
This indicator often suggests that the economy isn't performing well, and has historically always been… pic.twitter.com/CJKQnTRhTc
More Bankruptcies, Lower Assets
According to Cornerstone Research, 72 bankruptcy filings by public and private companies boasted over $100 million in assets during the first half of 2023. This figure already eclipses the 53 filings for the whole of 2022. Even more concerning is that the average assets at the time of these filings—$780 million—fall significantly below the 2022 average of $1.62 billion and the 2005-2022 average of $2.05 billion.
The sectors most affected by this bankruptcy wave are manufacturing, retail trade, and services. Manufacturing alone accounted for 33% of all bankruptcies filed in the first half of 2023, with 24 filings compared to just 13 the previous year.
As crypto lending companies and exchanges find themselves in the bankruptcy fray, it’s a clear sign that no industry is truly isolated from economic distress.
It’s not just the number of bankruptcies that’s alarming, but also their magnitude. The first half of 2023 saw as many ‘mega bankruptcies’—those filed by companies with over $1 billion in reported assets—as all of 2022. SVB Financial Group tops this list, declaring bankruptcy with $19.68 billion in assets, followed by retail giant Bed Bath & Beyond Inc. with $4.40 billion. Notably, six mega bankruptcies emerged from the services industry, reflecting its heightened vulnerability.
The Crypto Angle
While the cryptocurrency market is no stranger to volatility, these bankruptcies might indicate that the traditional financial system’s challenges are seeping into decentralized finance, warranting further scrutiny.
As Whalechart’s tweet suggests, these indicators usually signal imminent economic downturns, often succeeded by colossal stock market crashes. With the alarming bankruptcy stats in hand, both individual investors and corporate strategists would do well to reevaluate their financial game plans.
Whether you’re invested in blue chips, crypto, or emerging markets, the message is loud and clear: caution is the watchword as we navigate the financial waters of 2023.