Bitcoin fell as much as 7.2% to $20,816, its lowest level since December 2020, extending Monday’s 15% plunge.
The world’s largest cryptocurrency has lost more than 50% since the start of the year and 28% since Friday.
Token #2, Ether, lost as much as 10% to $1,075, its lowest since January 2021, and smaller tokens took even more hits.
The selloff was the result of Celsius suspending withdrawals and strong U.S. inflation data on Friday that fueled expectations of a sharper rise in Federal Reserve interest rates, the portfolio manager said. QCP Capital fund, low Singapore, in a bond.
“The market is now freaking out about the impact and contagion if Celsius becomes insolvent,” QCP said.
Celsius said in a blog post https://blog.celsius.network/a-memo-to-the-celsius-community-59532a06ecc6 published Monday in Asia, citing extreme market conditions, that it had frozen withdrawals and transfers between accounts, “to stabilize cash and operations while we take steps to preserve and protect assets.”
New Jersey-based Celsius, which has approximately $11.8 billion in assets, offers interest-bearing products to clients who deposit cryptocurrencies on its platform. It then lends the cryptocurrencies to earn a return.
All asset classes were also rocked by higher inflation as investors dumped risky assets.
The S&P has fallen for four straight days, with the benchmark now down more than 20% from its last closing high, confirming a bear market by a commonly used definition. [.N]
Cryptocurrency stocks have been particularly hard hit.
Shares of crypto bank Silvergate Capital closed down 16.7% on Monday, BTC buyer and business intelligence software provider MicroStrategy tumbled 25.2% and cryptocurrency exchange Coinbase Global fell 25.2%. lost 11.4%.