Bitcoin plunged to a new 18-month low on Wednesday, dragging in small tokens, deepening the market collapse caused by crypto lender Celsius this week and freezing customer withdrawals.
The world’s largest cryptocurrency fell 7.8% to $ 20,079.72 (19,311.52 euros), the lowest since December 2020. Since Friday, it has lost about 33% of its value to the US dollar, down more than 50% from the beginning. This year’s. It was down about 70% from November’s record high of $ 69,000 (€ 66,360).
Bitcoin finally fell 3.4% to $ 21,336 (Euro 20,537).
The digital currency sector has entered this week after U.S. crypto lender Celsius has frozen withdrawals and remittances between accounts, agitating the threat of transmission in markets already upset by the end of terraUSD and luna tokens last month. I was hit.
The Fed’s expected rate hike of 75 basis points late Wednesday in the midst of intense inflation also puts pressure on risky assets from cryptocurrencies to equities.
According to digital asset manager CoinShares, crypto funds showed a $ 102 million outflow last week, citing investors’ expectations for central bank policy tightening.
According to CoinMarketCap data, the value of the global crypto market fell 70% from its peak of $ 2.97 trillion (€ 2.86 trillion) in November to less than $ 900 billion (€ 865.6 billion).
“Part of the broader crypto ecosystem faces fairly demanding calculations,” said Mikkel Morch, executive director of digital asset hedge fund ARK36. “As the bear market reality begins to settle, the hidden leverage and structural weaknesses of projects that only worked when prices rose finally became apparent.”
Mr. Celsius has hired a restructuring lawyer and is looking for possible financing options from investors, the Wall Street Journal quoted people familiar with the matter. Celsius is also looking for strategic alternatives, including fiscal restructuring, he said.
Smaller cryptocurrencies that tend to work with Bitcoin have also fallen. The second largest token, Ether, fell to the lowest since January 2021 at $ 1,013 (€ 974.74) and finally fell 8.1% to $ 1,108 (€ 1,066.15).
The crypto market turmoil has spread to other companies, and many exchanges are reducing their workforce.
Coinbase Global Inc, a major US exchange, announced on Tuesday that it would cut about 1,100 jobs, or 18% of its workforce. Another US exchange, Gemini, said this month it would cut its workforce by 10%.
Still, others continue to hire. Binance, the world’s largest exchange, said it had 2,000 positions on Wednesday, and the US exchange Kraken said it would play 500 roles.
“Hanker Down,” tweeted Binance CEO Changpeng Zhao.
Crypto Hedge Fund Three Arrows said it is committed to solving the problem as social media faces the problem of liquidation.
US crypto broker Genesis has also sought to ease investor concerns about liquidity after it happened to Celsius. Genesis said its lending business continues to meet customer demand, despite a strong balance sheet and increasing market volatility.