Bitcoin Sinks to a New 18-Month Low as Crypto Crash Deepens

LONDON/NEW YORK, June 15 (Reuters) – Bitcoin plunged to a new 18-month low on Wednesday, dragging smaller tokens with it and deepening a market crash triggered by crypto lender Celsius this week that froze customer withdrawals.

The world’s largest cryptocurrency fell as much as 7.8% to $20,079.72, its lowest level since December 2020. It has lost around 33% of its value against the US dollar since Friday, falling more than 50% since beginning of the year. It has plunged 70% from its all-time high of $69,000 in November.

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

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

Expectations of a 75 basis point interest rate hike by the US Federal Reserve later on Wednesday amid skyrocketing inflation have also put pressure on risk assets, from cryptocurrencies to stocks. .

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

The value of the global crypto market has fallen 70% to less than $900 billion from a high of $2.97 trillion in November, data from CoinMarketCap shows.

Bitcoin so far in 2022

“Some parts of the broader crypto ecosystem are facing a pretty harsh reckoning,” said Mikkel Morch, CEO of digital asset hedge fund ARK36. “As the reality of the bear market begins to set in, the hidden leverages and structural weaknesses of projects that only worked when prices rose are finally coming to light.”

Celsius has hired restructuring lawyers and is looking at potential 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 alongside bitcoin, also fell. Ether, the second largest token, fell to $1,013, the lowest since January 2021, and was down 8.1% at $1,108.

The chaos in the cryptocurrency market has spread to other businesses, with a number of exchanges cutting their workforce.

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

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

“Duck down,” Binance CEO Changpeng Zhao tweeted.

Crypto hedge fund Three Arrows, amid social media talk that it is facing liquidation issues, said it was committed to working things out. read more

American crypto broker Genesis has also sought to ease investor concerns about 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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