• Wed. Jun 22nd, 2022

Bitcoin Falls to New 18-Month Low as Crypto Slump Deepens

ByHazel R. Lang

Jun 15, 2022

LONDON/NEW YORK, June 15 (Reuters) – Bitcoin fell to a fresh 18-month low on Wednesday, dragging smaller tokens with it and deepening the market meltdown sparked by crypto lender Celsius this week, freezing stocks. customer withdrawals.

The world’s largest cryptocurrency fell 7.8% to $20,079.72, its lowest level since December 2020. It has lost about 33% of its value against the US dollar since Friday, falling more 50% since the start of the year. It has fallen around 70% from its record high of $69,000 in November.

Bitcoin was last down 3.4% at $21,336.

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The digital currency sector took a beating this week after US crypto lender Celsius froze withdrawals and transfers between accounts, stoking fears of contagion in markets already reeling from the demise of terraUSD and luna tokens the month last.

Expectations of a 75 basis point hike in U.S. Federal Reserve interest rates later Wednesday amid runaway inflation also put pressure on risky assets, from cryptocurrencies to stocks.

Crypto funds saw outflows of $102 million last week, according to digital asset manager CoinShares, citing investors’ anticipation of tighter central bank policy.

The value of the global crypto market fell 70% to less than $900 billion from a peak of $2.97 trillion in November, according to data from CoinMarketCap.

Bitcoin so far in 2022

“There are parts of the broader crypto ecosystem that are facing pretty harsh judgment,” said Mikkel Morch, executive director of digital asset hedge fund ARK36. “As the reality of the bear market begins to set in, the hidden levers and structural weaknesses of projects that only worked when prices rose are finally being brought to light.”

Celsius has hired restructuring lawyers and is seeking possible financing options from investors, The Wall Street Journal reported, citing people familiar with the matter. Celsius is also exploring strategic alternatives, including financial restructuring, he said.

Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also fell. Ether, the second-largest token, fell to $1,013, the lowest since January 2021, and was last down 8.1% at $1,108.

The chaos in the crypto market has spread to other businesses, with a number of exchanges downsizing.

The major US exchange Coinbase Global Inc (COIN.O) announced on Tuesday that it would cut around 1,100 jobs, or 18% of its workforce. Gemini, another US exchange, said this month it would cut 10% of its workforce. Read more

Yet others continue to hire. Binance, the world’s largest exchange, said on Wednesday it was hiring for 2,000 positions, and US exchange Kraken said it had 500 vacancies. Read more

“Hang on,” Binance CEO Changpeng Zhao tweeted.

Crypto hedge fund Three Arrows, amid talk on social media it is facing liquidation issues, said it was determined to fix the issues. Read more

US crypto broker Genesis has also sought to ease investor concerns over liquidity after what happened to Celsius. Genesis said its balance sheet was strong and its lending business continued to meet customer demand despite high market volatility. Read more

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Reporting by Tom Wilson in London and Gertrude Chavez-Dreyfuss in New York Additional reporting by Alun John in Hong Kong Editing by Jason Neely and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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