Bitcoin sinks to fresh 18-month low of $20,079 as crypto meltdown deepens
Bitcoin slumped on Wednesday to a new 18-month low, dragging smaller tokens down with it and deepening a market meltdown sparked by crypto lender Celsius this week freezing customer withdrawals.
The world's largest cryptocurrency fell as much as 7.8% to $20,079.72, its lowest since December 2020. It has lost about 33% of its value against the U.S. dollar since Friday, dropping more than 50% since the beginning of the year.
It has slumped about 70% from its record high of $69,000 in November. Bitcoin was last down 3.4% at $21,336.
The digital currency sector has been pummelled this week after U.S. crypto lender Celsius froze withdrawals and transfers between accounts, stoking fears of contagion in markets already shaken by the demise of the terraUSD and luna tokens last month.
Expectations of a 75 basis-point interest rate hike from the U.S. Federal Reserve later on Wednesday amid blistering inflation have also pressured risky assets from cryptocurrencies to stocks.
Crypto funds saw outflows of $102 million last week, according to digital asset manager CoinShares, citing investors' anticipation of tighter central bank policy.
The value of the global crypto market has tumbled 70% to under $900 billion from a peak of $2.97 trillion in November, CoinMarketCap data shows.
"Some parts of the broader crypto ecosystem are facing a rather harsh reckoning," said Mikkel Morch, executive director at digital asset hedge fund ARK36. "As the reality of the bear market starts to settle in, the hidden leverages and structural weaknesses of projects that only worked when the prices went up are finally brought to light."
Celsius has hired restructuring lawyers and is looking for possible financing options from investors, the Wall Street
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