Bitcoin slumps below $23,000, lowest in 18 months

Published June 13, 2022
Souvenir tokens representing cryptocurrency networks Bitcoin, Ethereum, Dogecoin and Ripple plunge into water in this illustration taken on May 17, 2022. — Reuters
Souvenir tokens representing cryptocurrency networks Bitcoin, Ethereum, Dogecoin and Ripple plunge into water in this illustration taken on May 17, 2022. — Reuters

Bitcoin tumbled on Monday to an 18-month low under $23,000 in a broad cryptocurrency crash, as investors shunned risky assets in the face of a vicious global markets selloff, just seven months after the virtual unit surged to a record high.

The world's most popular crypto asset also took a heavy knock from the news that crypto lending platform Celsius Network paused withdrawals, citing volatile conditions.

Losses accelerated as major exchange Binance temporarily suspended Bitcoin withdrawals but advised customers to use other networks.

World stock markets have plunged since Friday when data showed US inflation at a fresh four-decade high.

That heightened global recession fears and sent investors fleeing risky cryptocurrencies like Bitcoin and Ether — and embracing traditional safe assets such as the dollar.

'Severe bruising'

“Bitcoin and Ether are continuing to get a severe bruising in the ring,” said Hargreaves Lansdown analyst Susannah Streeter.

“They are prime victims of the flight away from risky assets as investors fret about spiralling consumer prices around the world.”

The digital currency dived more than 16 per cent to hit $22,603 in afternoon London deals, striking a level last seen in December 2020.

Bitcoin has now tanked by 66pc since striking a record peak $68,991.85 last November.

Investors sought safety on Monday with the US central bank, which is seen likely to aggressively ramp up borrowing costs further to combat runaway inflation.

Bitcoin's decline worsened after the news from Celsius Network.

“Today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said in a statement.

Celsius made the move “due to extreme market conditions”, it added.

The total value of customer deposits had already shrunk by more than half to under $12 billion in May compared with the end of last year.

Cryptocurrency market value slumps under $1 trillion

Meanwhile, the value of the cryptocurrency market on Monday fell below $1 trillion for the first time since January 2021, according to data site CoinMarketCap, reaching as low as $926 billion.

The global cryptocurrency market peaked at $2.9 trillion in November 2021, but it has faltered so far this year.

"As inflation proves to be an even trickier opponent to beat than expected, Bitcoin and Ether are continuing to get a severe bruising in the ring," said Streeter.

"They are prime victims of the flight away from risky assets as investors fret about spiralling consumer prices around the world."

In a sign of the growing importance of cryptocurrencies, two countries, El Salvador and the Central African Republic, have taken the gamble of adopting Bitcoin as legal tender — despite strong criticism from international financial institutions.

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