Bitcoin plunged Monday to its lowest level in eighteen months in a market with no appetite for risk. As stock exchanges see red around the world and investors flock to the safe haven dollar, “probably the biggest carnage is in the crypto world,” comments Jeffrey Halley, analyst at Oanda.
Bitcoin saw its price drop more than 10% to $24,580 around 8:40 a.m. GMT (10:40 a.m. London), its lowest since December 2020 and a drop of more than 65% since its all-time high in November 2021. While the The cryptocurrency market was worth more than $3 trillion at its peak seven months ago, it is approaching the $1 trillion mark, according to the Coingecko site, which lists more than 13,000 different cryptocurrencies.
In 2021, this still nascent sector had supplied more and more players in traditional finance, whose risk appetite was fueled by the ultra-loose policies of central banks around the world. But the rate hike by the US Federal Reserve (Fed), which is trying to fight runaway inflation, is weighing on the markets.
The Celsius platform “has ‘suspended’ withdrawals”
In addition, the decline of bitcoin accelerated after the Celsius platform “suspended” withdrawals”, comments Mark Haefele, analyst at UBS. This company, which managed assets valued at $12 billion in mid-May according to its website, notably offered its users the opportunity to place their “historic” cryptocurrencies, such as bitcoin and ether, to invest in new cryptocurrencies.
In October, Celsius notably raised $400 million from the Caisse de depot et placement du Québec (CDPQ), which was pleased to partner with the “world’s leading cryptocurrency lender”. “Due to extreme market conditions, we are suspending all withdrawals and transfers between accounts,” the platform announced. “There is breakage in the crypto space and it is likely to get worse,” warns Neil Wilson, an analyst at Markets.com.
In early May, terra, a cryptocurrency that was to be priced against the dollar, crashed, causing investors concern.