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Bitcoin at its lowest since the end of 2020, the crypto market below 1,000 billion dollars

Bitcoin at its lowest since the end of 2020, the crypto market below 1,000 billion dollars
Written by madishthestylebar

Physical representations of bitcoins at a cryptocurrency exchange near the Grand Bazaar in Istanbul, Turkey, on October 20, 2021 (AFP/Ozan KOSE)

Bitcoin plunged to its lowest level in 18 months on Monday, weighed down by the lack of investor risk appetite, with the cryptocurrency market briefly falling below the symbolic cap of 1,000 billion dollars.

The suspension of cryptocurrency investment platform Celsius and the brief freeze on bitcoin withdrawals from the world’s largest platform Binance contributed to the lack of appetite for cryptocurrencies.

As stock markets see red around the world and investors flock to the safe haven dollar, “probably the biggest carnage is in the crypto world,” commented Jeffrey Halley, analyst at Oanda.

Bitcoin saw its price drop more than 15% on Monday, falling to $22,603, the lowest since December 2020 and a drop of more than 66% since its all-time high in November 2021.

The cryptocurrency market, which was worth more than 3 trillion dollars at its peak seven months ago, temporarily fell below the 1,000 billion dollar threshold before rising to 1,008 billion around 4:10 p.m. GMT, according to the Coingecko site, which lists more than 13,000 different cryptocurrencies.

In 2021, this still nascent sector had attracted more and more traditional finance players, whose risk appetite was fueled by the ultra-loose policies of central banks around the world.

But the rate hike by the Federal Reserve (Fed), which is trying to fight runaway inflation, is weighing on the markets.

Chart showing bitcoin price since January 2017 (AFP/)

Chart showing bitcoin price since January 2017 (AFP/)

In addition, the decline of bitcoin accelerated “after the Celsius platform + suspended + withdrawals”, notes Mark Haefele, analyst at UBS.

This company, which managed assets valued at $12 billion in mid-May according to its website, notably offered its users the opportunity to place their “historic” cryptocurrencies, such as bitcoin and ether, to invest in new cryptocurrencies.

In October, Celsius notably raised $400 million from the Caisse de depot et placement du Québec (CDPQ), which was pleased to partner with the “world’s leading cryptocurrency lender”.

“Due to extreme market conditions, we are suspending all withdrawals and transfers between accounts,” the platform announced on Monday.

“There is breakage in the crypto space and it is likely to get worse,” warns Neil Wilson, an analyst at Markets.com.

The largest cryptocurrency shopping platform, Binance, announced on its Twitter account on Monday that the withdrawal of bitcoins was “temporarily suspended”.

The company announced a few hours later that these withdrawals had resumed.

In early May, terra, a cryptocurrency that was supposedly priced against the dollar, crashed, causing investors to worry.

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