Bitcoin, the world’s largest cryptocurrency, was trading at $ 20,000 symbolically during early London trading.
Bitcoin traded at $ 17,592.78 on Saturday, its first low since December 2020 of $ 20,000. It lost about 60% of its value this year and 37% this month alone in the recent meltdown in the cryptocurrency sector.
Its fall follows the problems of several key industry players. He said further downturns could have a knock-on effect on market players, as other crypto investors were forced to sell their holdings to cover margin calls and offset losses.
Crypto hedge fund Three Arrows Capital is pursuing options for sale of assets and bailout from another firm, its founders told the Wall Street Journal in a story published Friday, the same day Asian-focused crypto lender Babel Finance said it would shut down the withdrawal.
Crypto lender Celsius Network says it will suspend customer withdrawals this month. In a blog on Monday, Celsius said it would continue to work with regulators and authorities, but it would pause the questionnaires of its customers. Celius said it “takes time” to stabilize its liquids and operations.
“If enough debt is withdrawn from the system, and lenders have to absorb losses by Celsius and the three arrows, they will reduce the size of their future debt books, which means the total amount of debt available in the crypto ecosystem is low.”
“It feels like 2008 is just how the domino effect of bankruptcies and bankruptcies can be,” Farthing said.
Smaller tokens that usually move along with Bitcoin are also injured. The No. 2 token ether was at $ 1,0752, falling below its own symbolic level of $ 1,000 over the weekend.
The decline in crypto markets coincided with a slide in equities, as US stocks suffered their biggest weekly percentage decline in two years due to fears of rising interest rates and the prospect of a recession.
Bitcoin’s movements follow a similar pattern to other risk assets, such as tech stocks.
The total crypto market capitalization is approximately $ 877 billion, down from the maximum of $ 2.9 trillion in November 2021, according to price site Coinmarketcap.
The downturn in stablecoins – a type of crypto designed to hold fixed value – suggests investors are pulling money out of the sector altogether.