Bitcoin price plunges below $23,000 as crypto lender Celsius halts withdrawals

Bitcoin’s selloff, triggered by a reversal in the buying mania that pushed it higher, has now become the third deepest in the cryptocurrency’s 13-year history.

On Monday, bitcoin fell to $22,611, according to CoinDesk. That’s down more than 20% from Friday and 67% from its November high of $68,991.

Bitcoin’s fall since November has contributed to an estimated $2 trillion wipeout in the broader market. Crypto’s total market capitalization, which peaked in November at nearly $3 trillion, stood at around $956 billion as of mid-morning Monday, according to data provider CoinMarketCap.

There are clear reasons why bitcoin is selling now. For one, its moves have generally been more aligned with other risky assets, like tech stocks, as professional traders have joined the crypto market in greater numbers. Speculative assets like crypto have fallen along with inflation and central bank efforts to combat that through higher interest rates, a dynamic that makes risky stocks less attractive than safer assets. On Friday, the US inflation index hit 8.6%, dragging the stock market down.

As turmoil rippled through the crypto market over the weekend, a widely used cryptocurrency froze customer withdrawals. Celsius Network LLC said it was suspending all withdrawals, inter-cryptocurrency exchanges and inter-account transfers “due to extreme market conditions”. As of May, the lender was managing $11 billion in user assets, according to its website.

Later, a major crypto exchange, Binance, halted bitcoin withdrawals. The company said at 8 a.m. ET it was a technical issue and expected them to resume in 30 minutes. Withdrawals resumed just before noon New York time.

Companies in the sector are increasingly resorting to layoffs in the middle of the sale. A Celsius competitor called BlockFi said on Monday it would cut 20% of its workforce of about 850 employees, according to a statement from chief executive Zac Prince. “Like many others in technology, we have been affected by the dramatic change in macroeconomic conditions, which have had a negative impact on our rate of growth,” Prince said. wrote on Twitter. On Friday, announced that it would cut 260 employees, or around 5% of its staff.

Beyond bitcoin and cryptocurrencies, publicly traded stocks in the crypto sector were also being punished. MicroStrategy Inc.

MSTR -24.80%

was down 23%. Coinbase global Inc.


was down 12%. Riot Blockchain Inc.

RIOT -10.19%

was down 9%.

MicroStrategy, an enterprise software company from Virginia, has locked its fortunes in bitcoin, a strategy spearheaded by the company’s founder and CEO, Michael Saylor. The company converted all of its cash reserves into bitcoins, issued debt to buy more bitcoins, and borrowed funds to buy even more bitcoins.

It had 129,000 bitcoins on its balance sheet at the end of the first quarter, the company reported. Nearly 96,000 of them had not been given as collateral. The rest, however, could be subject to margin calls depending on the size of the sale.

The company has yet to receive such calls, Saylor said. “We don’t expect to receive a margin call, and the company has many additional safeguards should we release more,” he said in an email.

Individual investors, however, received margin calls. About $1 billion in collateral pledged by around 260,000 retail traders has been liquidated in the past 24 hours, according to data provider CoinGlass.

The revival of day trading during the pandemic and the hunt for assets that could generate returns as bond yields hit historic lows, led bitcoin to take off in the fall of 2020. The cryptocurrency hit record highs in November last year. Since then, it has fallen 65% against the dollar, belying predictions by proponents who said the cryptocurrency could replace gold as a hedge against inflation and turmoil in broader markets.

“Risky, highly liquid cryptocurrencies are usually the first to hit the market,” said Jeff Mei, chief marketing officer at blockchain technology solutions provider ChainUp.

Incidents such as the halt in Celsius pullbacks and the earlier collapse of the stablecoin terra USD tend to stoke fear and create a lack of confidence in the market, said Leah Wald, co-founder and managing director of the manager. Valkyrie Investments assets. This reverses the kind of boundless enthusiasm traders have had for crypto, a dynamic dubbed “hopium,” which has driven cryptos since 2020.

“Selling is created when there’s a lot of ‘hopium’, and last year there was a lot of ‘hopium’ and euphoria about projects that didn’t have a lot of foundation behind them,” she said.

None of this should be surprising, she said. Crypto follows exactly the same path as other mania-driven assets, like tech stocks in the dot-com era or silver in the days of the Hunt brothers. “All assets ultimately follow the same trend,” she said. “Even though we think crypto is a new asset class, it’s not.”

Write to Elaine Yu at, Joe Wallace at and Paul Vigna at

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Post expires at 7:55pm on Thursday June 23rd, 2022