Bitcoin dips 17% to below $23,000; Celsius freezes all withdrawals

Crypto market cap falls below $1 trn for first time since early 2021

Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown. 

The value of the cryptocurrency market fell below $1 trillion for the first time since January 2021, according to data site CoinMarketCap.

The world’s largest digital token tumbled as much as 17 per cent to $22,603 – its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. 

Celsius Network paused withdrawals, swaps and transfers after weeks of speculation over the sustainability of the outsized returns being offered by the DeFi lending platform, fueling a broad cryptocurrency selloff. 

After Celsius’s announcement, Bitcoin touched an 18-month low of $23,476. No 2 token ether dropped as much as 16 per cent to $1,177, its lowest since January 2021.

“It’s still an uncomfortable moment, and there’s some contagion risk around crypto more broadly,” said Joseph Edwards, head of financial strategy at Solrise Finance.

“The fundamentals to support stabilisation and recovery just aren’t there,” said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. “Things can and likely will get worse before they get better.”  

The shares of companies that have embraced crypto also tumbled. MicroStrategy, the software company that made buying Bitcoin as part of its corporate strategy, fell as much as 28 per cent. Jack Dorsey’s Block Inc. dropped by as much as 10 per cent. Bitcoin miners Marathon Digital Holdings and Riot Blockchain Inc. slumped as much as 19 per cent and 16 per cent, respectively.