Crypto lender keeps Bitcoin assets frozen after prices fall

THE cryptocurrency lender that sent the digital currency market into a tailspin last week has said it will continue to freeze Bitcoin holdings after prices hit 18-month lows.

Celsius Networks said it would “take time” to stabilise its business as customers found withdrawals blocked for a second week.

Bitcoin fell to $17,722 (£14,485) over the weekend, down from $47,000 at the start of the year. It was the first time prices had fallen below $20,000 since November 2020 and was below levels in late 2017, the peak of the previous Bitcoin boom.

Us-based Celsius, which takes deposits and makes loans in cryptocurrencies, last week blocked savers from withdrawing their holdings, blaming “extreme market conditions”.

Yesterday it said it was determined to find a way out of the crisis, but withdrawals were likely to remain blocked.

“We want our community to know that our objective continues to be stabilising our liquidity and operations. This process will take time,” it said.

“We plan to continue working with regulators and officials regarding this pause and our company’s determination to find a resolution.

“Acting in the interest of our community remains our priority and we will continue to work around the clock.”

Bitcoin prices recovered slightly later yesterday, trading around $20,437, although prices remain down by 15.5pc over the past week.

Celsius’s struggles have been seen as a sign that sliding cryptocurrency prices could set off a wave of forced selling as companies that borrow against their cryptocurrency holdings are forced to repay the loans.

Hong Kong exchanges Babel and Hoo have also suspended withdrawals. Last week Binance, the world’s largest exchange, briefly prevented Bitcoin withdrawals, blaming a technical issue.

Meanwhile, many large cryptocurrency companies have been forced to make heavy job cuts. Coinbase said last week that it would cut almost one in five jobs – about 1,100 people – with chief executive Brian Armstrong warning that an impending recession could mean a new “crypto winter”.

One cryptocurrency that has avoided the last week’s sell-off has been Dogecoin, a token that was started as a joke but which has become one of the most valuable digital assets due to support from Tesla chief executive Elon Musk.

Its price rose after Mr Musk tweeted on Sunday: “I will keep supporting Dogecoin.” He said he was continuing to buy the cryptocurrency.