Bitcoin sinks to fresh 18-month low of $20,079 as crypto meltdown deepens

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
Photo: Bloomberg
Reuters London/New York
3 min read Last Updated : Jun 16 2022 | 2:37 AM IST
Bitcoin slumped 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 $20,079.72, its lowest since December 2020. It has lost about 33% of its value against the U.S. dollar since Friday, dropping more than 50% since the beginning of the year.
 
It has slumped about 70% from its record high of $69,000 in November. Bitcoin was last down 3.4% at $21,336.
 
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.
 
Expectations of a 75 basis-point interest rate hike from the U.S. Federal Reserve later on Wednesday amid blistering inflation have also pressured 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.
 
"Some parts of the broader crypto ecosystem are facing a rather harsh reckoning," said Mikkel Morch, executive director at digital asset hedge fund ARK36. "As the reality of the bear market starts to settle in, the hidden leverages and structural weaknesses of projects that only worked when the prices went up are finally brought to light."
 
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 to as low $1,013, the lowest since January 2021, and was last down 8.1% at $1,108.
 
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 said on Tuesday it would 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.
 
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.
 
"Hunker down," tweeted Binance CEO Changpeng Zhao.
 
Crypto hedge fund Three Arrows, amid social media chatter it is facing liquidation issues, said it was committed to working things out.
 
U.S. crypto broker Genesis also sought to ease investor concerns on liquidity after what happened to Celsius. Genesis said its balance sheet was strong and its lending business continued to meet client demand despite elevated market volatility.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :BitcoincryptocurrencyUS Federal ReserveInterest rate hike

Next Story