Bitcoin and other cryptocurrencies continued their slide on Tuesday as investors bailed out risky assets in anticipation Sharp hikes in interest rates to tackle inflation.
Celsius Network, which has 1.7 million customers, said “harsh market conditions” have forced it to temporarily halt all withdrawals, crypto swaps and transfers between accounts.
“We are taking this necessary action in the interest of our entire community in order to stabilize our liquidity and operations while we take steps to preserve and protect assets,” the company said in a blog post.
According to its website, the UK-registered company has about $3.7 billion in assets. He pays interest on cryptocurrency deposits and lends them to make a return.
“Yesterday’s suspension of percentage withdrawals gave additional bearish impetus,” noted Jeffrey Haley, senior market analyst, Asia Pacific, at Oanda. “I can only assume that the next big level for bitcoin psychologically will be $20,000.”
Taking the cryptocurrency market beats In recent months after the epidemic boom turned into a collapse. The world’s major central banks have raised interest rates to tame them soaring inflationMerchants rushed to him Get rid of high-risk investmentsincluding their volatile crypto assets.
Bitcoin, the world’s most valuable cryptocurrency, fell about 8% on Tuesday, falling below $23,000. It has lost about 25% of its value since Friday – which puts it undervalued by about 67%. absolutely high In November last year, when it traded around $69,000, according to data from Coinbase.
Ether, the second most valuable cryptocurrency, fell 4%, bringing its losses since Friday to about 32%. It has now lost about 75% of its value since November.
Binance, the world’s largest cryptocurrency exchange, suspended withdrawals on its bitcoin network for a few hours on Monday. The company said some transactions were “stalled” and caused a backlog.
“The Binance team is working on a long-term solution to expedite pending transactions on the Bitcoin (BTC) network and prevent similar situations from occurring in the future,” the company said in a statement.
The so-called “stablecoins” – cryptocurrencies tied to the value of traditional assets – have also taken a hard hit. Tether, a popular stablecoin, broke its peg to the US dollar in May, breaking the view that it could act as a hedge against volatility.
TerraUSD, a riskier algorithm-based stablecoin that uses complex code to peg its value to the US dollar, collapsed in the same month, wiping out the savings of thousands of investors. The coin was valued at just over $18 billion in early May before it collapsed, according to data from CoinMarketCap.
Celsius Network did not say when it would allow customers to withdraw their deposits again, but that “it will take some time”.
Meanwhile, governments are closely watching the fallout from the cryptocurrency crash and could act to protect investors.
“There are many risks associated with cryptocurrencies,” US Treasury Secretary Janet Yellen told the Senate last month. She said that her department is scheduled to issue a report in this regard.
– Julia Horowitz contributed to the report.
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