Crypto market sinks below $1 trn after latest DeFi blowup; Bitcoin down 17%

business-standard.com:

Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown.

The world’s largest digital token tumbled as much as 17% to $22,603 -- its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 17%. And the total market value, which topped $3 trillion in November, dropped below $1 trillion as of 10:54 a.m. New York time on Monday, according to CoinGecko.

“The fundamentals to support stabilization and recovery just aren’t there,” said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. “Things can and likely will get worse before they get better.”

The shares of companies that have embraced crypto also tumbled. MicroStrategy Inc., the software company that made buying Bitcoin as part of its corporate strategy, fell as much as 28%. Jack Dorsey’s Block Inc. dropped by as much as 10%. Bitcoin miners Marathon Digital Holdings Inc. and Riot Blockchain Inc. slumped as much as 19% and 16%, respectively.

Binance, the largest crypto trading platform, temporarily suspended withdrawals of the Bitcoin network because of an transaction processing issue. Withdrawals were still being made on other networks.

The selloff comes as traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May. Cryptocurrencies, which have struggled amid the Fed’s policy in recent months, have been hit particularly hard. The