No let-up in brutal crypto sell-off as Bitcoin slips towards $20,000
BITCOIN came close to falling through $20,000 for the first time in two years yesterday as the global crypto rout and impending redundancies in the sector continue to rock market confidence.
The world’s biggest cryptocurrency declined nearly 9pc to $20,100 (£16,600) in early trading, hovering at a level not seen since December 2020.
Back then, the digital token was soaring to never-before-seen highs and peaked at $67,500 in November last year.
Today, cryptocurrencies are trapped in a spiral of decline. Over the past 11 days Bitcoin’s price has shrunk by a third, wiping $150bn from its market valuation.
Ethereum, the second-biggest digital currency, fell as much as 15pc to $1,000 yesterday, according to Coinmarketcap data.
Bitcoin was down 3.4pc last night at $21,336.
The cryptocurrency’s trajectory has been inexorably downwards since late last year amid a wider rout in digital assets.
The sell-off is being driven by expectations of interest rate rises around the world, with the US Federal Reserve expected to rise rates last night by the most since 1994.
The Bank of England is expected to follow suit today with similar rate increases.
Marcus Sotiriou, an analyst with London-based digital asset broker Globalblock, said investors were also nervous about Celsius, a cryptocurrency lender that suspended all withdrawals on Monday and has yet to unfreeze them. Citing investor fears of a potential insolvency linked to he suspension of user accounts, Mr Sotiriou said that Celsius might need to draw on hitherto untested reserves to survive the current period.
“If we see further selling pressure that could result in a cascade of liquidations,” said Mr Sotiriou.
Globalblock said on Tuesday that Celsius has seen a sharp fall in its assets under management, saying the lender has about $3bn equivalent in client crypto assets, down from $28bn on Nov 20.
Binance, the world’s biggest cryptocurrency exchange, briefly halted Bitcoin withdrawals at the start of the week as the price fell, blaming a “stuck transaction”.
The incident fuelled panic in the market.