Bitcoin and other cryptocurrencies continue to lose value. This weekend, a new crash took the most famous digital currency below the $26,000 mark, its lowest level in more than a year. Ethereum, meanwhile, fell 28% in the space of a week. This sharp drop is partly due to a shock announcement from the Celsius platform.
The meteoric rise of the years 2020 and 2021 seems well and truly over. Since the beginning of May, all cryptocurrencies have been having a hard time. Investors record their worst losses in years, while the market fails to stabilize, preferring instead to fall inexorably. The situation is so catastrophic that Bitcoin reaches its lowest levels in monthswhile experts are already predicting that it will soon drop below the $20,000 mark.
And it will be hard to prove them wrong after the events of this weekend. Indeed, it is the entire cryptocurrency market that has once again been shaken up. At present, the latter is only worth 1,030 billion dollars, or a 7.5% drop in just 24 hours. Bitcoin, for its part, has of course suffered a lot from this brutal drop. The currency is back below $26,000for the first time in months.
Cryptocurrency Market Suffers Another Catastrophic Crash
After a brutal fall of 18%, Bitcoin is therefore now worth 25,513 dollars, or €24,357. This is its lowest level for the year as well as for more than a year. As for Ethereum, the landing was even more violent. In the space of a week, the number 2 cryptocurrency lost 28% of its value. And these two currencies are far from being the only ones. DOGE down 28%ADA by 24%, XRP by 18%, SOL by 31%, BNB by 22%, DOT by 28%, AVAX by 35% and MATIC by 25%.
Clearly, there is panic on all sides. The question arises of the origins of a crash of such magnitude. For the past few months, economic and geopolitical instability globally has triggered some timidity among investors. Then, in mid-May, the devaluation of stablecoins, notably TerraUSD, caused a chain reaction that rippled through the entire cryptocurrency market. But that does not explain the sudden drop this weekend.
If the causes are most likely multiple, it is difficult not to link the phenomenon to the surprise announcement of the Celsius platform that took place last night. In a press release, published on her blog, she states that “Due to extreme market conditions, we are announcing today that Celsius is halting all withdrawals, swaps and transfers between accounts”. To justify itself, the platform explains taking “taking this action today to put Celsius in a better position to meet its withdrawal obligations over time”.
Related: Bitcoin Has No Future According To The CEO Of This Cryptocurrency Exchange
As a reminder, Celsius Network is a platform that offers investors to stalk their assets in order to earn money through borrowing. Celsius allows the use of 35 cryptocurrencies, including of course the most popular, as well as most stablecoins, such as TerraUSD. Predictably, the announcement was followed by a fall in CEL, the platform-specific cryptocurrency, causing it to lose more than half of its value in just an hour.
.@CelsiusNetwork is pausing all withdrawals, swaps, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2
— Celsius (@CelsiusNetwork) June 13, 2022
The sequence of these cases therefore does not help Bitcoin and its cousins to recover. While some continue to argue that cryptocurrencies are an excellent fallback solution in the event of high inflation, it is clear that the current context proves this theory wrong. At this rate, it’s hard to imagine Bitcoin crossing the $250,000 mark, as some predict.