Bitcoin stabilizes after heavy losses but pessimism reigns in crypto markets -Breaking
© Reuters. FILE PHOTO – Representations for the Ripple and Bitcoin virtual currencies can be seen on a computer motherboard in this illustration photo, February 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo
Hannah Lang, Elizabeth Howcroft, and Tom Wilson.
LONDON/WASHINGTON – The volatility of the asset class was shattered by the recent 18-month-low.
Bitcoin recovered to positive territory, rising as high as 7.3% overnight at $20.816, the lowest level since Dec. 2020. The last time it hovered around $22,470 was in December 2020.
World’s biggest cryptocurrency saw a 15% drop on Monday. It was its steepest single-day fall since March 2020. This year, it has dropped nearly half its value. It also lost more than 20% from Friday. The stock has dropped nearly 70% from its November record of $69,000.
Celsius in New Jersey, which is concerned about “extreme” market conditions said that this week it had frozen transfers and withdrawals between accounts to stabilize liquidity and operations. While we took steps to protect and preserve assets, Celsius stated.
This move was combined with the expectation of U.S. Federal Reserve interest rates rising sharply after last week’s high U.S. inflation numbers, which pushed crypto market value below $1 trillion for first time since Jan 2021.
Many crypto market watchers are pessimistic about bitcoin’s future prospects.
Richard Usher, a crypto-firm BCB Group said that “with the wider risk sentiment being firmly negative sellers had it all their way for a few hours.” To turn the price around, it will require a significant shift in overall risk sentiment.
The slump in Bitcoin is expected to have ripple effects on other crypto-market companies.
Coinbase, a cryptocurrency exchange (NASDAQ: Global Inc) announced Tuesday that it will reduce 18% of its workforce to 1,100 jobs as part of an effort to control costs in volatile market conditions.
MicroStrategy Inc, a US software company and major supporter of Bitcoin, stated last month that a fall below $21,000 would result in a request for additional capital to finance a loan it has secured using some of its bitcoin holdings.
It could then stake bitcoins more against the loan and trigger the sale or transfer of large amounts of its holdings. The company didn’t immediately reply to our request for comment after hours.
MicroStrategy & Coinbase were down more than 5.5% premarket on Tuesday, as crypto-related stocks fell. But they rose 8.11% & 0.27% by midday.
No. No. Ether has fallen 75% since November’s record of $4,869 which it reached in November.
(Graphic- bitcoin chart: https://fingfx.thomsonreuters.com/gfx/mkt/myvmnrmbapr/bitcoin%20chart.JPG)
Celsius had assets of around $11.8 million and offered interest-bearing products for customers who deposit cryptocurrency on its platform. To earn interest, it lends the coins.
QCP Capital, Singapore’s fund manager for funds, wrote that the market was now “panicking” about possible contagion and impact if Celsius goes bankrupt.
The May collapse of TerraUSD and luna tokens left crypto investors shaken. Soon after, a large stablecoin was launched, briefly breaking the 1:1 peg with USD.
The decision by Celsius to stop withdrawals raises new questions regarding regulatory oversight for such crypto-lending platforms.
Gary Gensler, chair of the U.S. Securities and Exchange Commission, stated Tuesday that these platforms operate in a similar way to banks and asked how such returns could be achieved.
“I advise the public. He said, “If it sounds too good to be true it may be,”