LONDON: Bitcoin tumbled on Monday to an 18-month low under $25,000 as investors shunned risky assets in the face of a vicious global markets selloff, months after the cryptocurrency hit a record high.
The unit took a heavy knock also from news that cryptocurrency lending platform Celsius Network paused withdrawals, citing volatile conditions.
World stock markets have plunged since Friday when data showed US inflation at a fresh four-decade high, increasing recession fears and sending investors running for safer assets like the dollar.
“It is not very surprising to see such a strong downturn as we have noticed an increased correlation over the last few years between traditional stocks, which have also tanked recently, and the cryptocurrency market,” noted XTB chief market analyst Walid Koudmani.
The world’s most popular cryptocurrency dived about 10 per cent to hit $23,794 in morning London deals, striking a level last seen in December 2020. The virtual unit has collapsed by 65pc in value since striking a record peak $68,991.85 in November.
Investors on Monday sought safety with the US central bank seen likely to aggressively ramp up borrowing costs further to combat runaway inflation.
Bitcoin’s decline accelerated 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.
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.
The global crypto market, comprising other virtual currencies which are tanking such as Ethereum, is worth about $1 trillion, according to crypto data aggregator CoinGecko.
Published in Dawn, June 14th, 2022
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