It was a rough weekend for cryptocurrencies as the value of bitcoin dipped below $24,000 for the first time in 18 months while digital coins lost a collective $200 billion in market capitalization.
Crypto took another hit over the weekend after Celsius Network, a leading digital coin lender, put a pause on withdrawals, citing volatile conditions in the market.
Bitcoin, the largest cryptocurrency, fell more than 13% early on Monday morning. It was trading at $23,822.31, according to Coinbase.
The selloff is an indication that investors are shedding risky assets in favor of safer options like the dollar as the US continues to be slammed by record levels of inflation — forcing the Fed to hike interest rates which could potentially push the economy into a recession.
Since peaking at $68,991.85 in November, bitcoin’s value has plummeted some 65%.
The second most popular virtual currency, ethereum, fell by more than 17%. As of early Monday morning, it was trading at $1,208.34 per unit.
The total value of crypto assets hit a peak of $2.8 trillion last November; it’s now slightly higher than $1 trillion, according to CoinGecko.
Investors on Monday sought safety with the US central bank seen likely to aggressively ramp up borrowing costs further to combat runaway inflation.
Bitcoin’s decline accelerated after the news from Celsius Network.
“Today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said in a statement.
Celsius made the move “due to extreme market conditions”, it added.
The total value of customer deposits had already shrunk by more than half to under $12 billion in May compared with the end of last year.
Last month, TerraUSD, a so-called stablecoin that was pegged to the US dollar, collapsed, wiping out $40 billion in investor funds.
Stablecoins are supposed to be less vulnerable to big swings — thus the name — but Terra suffered a spectacular collapse in a matter of days.