Bitcoin falls to fresh 18-month low as crypto meltdown deepens

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LONDON, June 15 (Reuters) — Bit­coin tum­bled on Wednes­day to a new 18-month low, drag­ging small­er tokens down with it and deep­en­ing a mar­ket melt­down sparked by cryp­to lender Cel­sius this week 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. It has slumped about 70% from its record high of $69,000 in November.

The dig­i­tal cur­ren­cy sec­tor has been pum­melled this week after U.S. cryp­to lender Cel­sius froze with­drawals and trans­fers between accounts, stok­ing fears of con­ta­gion in mar­kets already shak­en by the demise of the ter­raUSD and luna tokens last month.

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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 tum­bled 70% to under $900 bil­lion from a peak of $2.97 tril­lion in Novem­ber, Coin­Mar­ket­Cap data shows.

Bit­coin so far in 2022

“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 a 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.

The chaos in the cryp­to mar­ket has spread to oth­er com­pa­nies, with a num­ber of exchanges slash­ing workforces.

Major U.S. exchange Coin­base Glob­al Inc (COIN.O) said on Tues­day it will cut about 1,100 jobs, or 18% of its work­force. Gem­i­ni, anoth­er U.S. exchange, said this month it would cut 10% of its work­force. read more 

Still, oth­ers are con­tin­u­ing to hire. Binance, the world’s largest exchange, said on Wednes­day it was hir­ing for 2,000 posi­tions, and U.S. exchange Krak­en said it had 500 roles to fill. read more 

“Hun­ker down,” tweet­ed Binance CEO Chang­peng Zhao.

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Report­ing by Tom Wil­son; addi­tion­al report­ing by Alun John in Hong Kong, edit­ing by William Maclean and Jason Neely

Our Stan­dards: The Thom­son Reuters Trust Principles.

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