Bitcoin tumbled on Wednesday to a new 18-month low, dragging
smaller tokens down with it and spurring a sharp fall in crypto markets sparked
by crypto lender Celsius freezing customer withdrawals.
The world's largest cryptocurrency fell as much as 7.8% to $20,289, its lowest
since December 2020. It has lost around 28% since Friday and more than half of
its value this year. Since its record high of $69,000 in November, it has
slumped about 70%.
Cryptocurrencies have been hit hard this week after U.S. crypto lender Celsius
froze withdrawals and transfers between accounts, stoking fears of wider
fall-out in digital asset markets already shaken by the demise of the terra USD
and luna tokens last month.
Expectations of sharper U.S. Federal Reserve interest rate hikes as inflation
in the world's biggest economy soars have also heaped 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 has fallen under $900 billion,
CoinMarketCap data shows, down from a peak of $2.97 trillion in November.
"The ripples running through the market haven't stopped yet," said
Scottie Siu, investment director at Hong Kong-based Axion Global Asset
Management. "I think we’re still in the middle of it, unfortunately, the
game isn’t over."
Celsius has hired restructuring lawyers and is looking for 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, it said.
Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also fell.
Ether, the second-largest token, fell as much as 12% to $1,045, a new 15-month
low.
Source: Reuters