By Nathalie Voit
The world’s largest cryptocurrency, Bitcoin, fell 17% on Monday trading as investors dropped the digital coin amid a broader market sell-off in global risk assets.
Bitcoin is now trading at an 18-month low of $23,413, a value not seen since December 2020. Ether, the world’s second-most popular cryptocurrency, is trading at $1,236 as of Monday afternoon, down 17% in the last 24 hours, according to data from CoinDesk.
The total market capitalization of all cryptocurrencies is now less than $1 trillion as the market shed more than $200 billion in value over the weekend and into Monday trading, crypto analytics firm CoinMarketCap said on June 13. For reference, the crypto market was valued at nearly $3 trillion in November, CoinMarketCap reported.
Several factors are responsible for the recent crypto market price crash. Hotter-than-expected U.S. inflation data released Friday from the government showed consumer prices accelerating at an 8.6% year-over-year pace in May, a new 40-year high. Additionally, the prospect of imminent interest rate hikes by the Fed stoked fears of a major upcoming recession.
Meanwhile, news that major U.S. cryptocurrency lending platform Celsius Network froze all withdrawals and transfers on June 13 due to “extreme market conditions” contributed to the extended sell-off. Reuters reported Monday that Bitcoin collapsed to $23,300 after the company’s shocking announcement.
“The Celsius situation is definitely adding fuel to the fire,” Vice President of corporate development and international at crypto exchange Luno Vijay Ayyar told CNBC.
“Broadly, the markets were already under pressure from inflation concerns and the interest rate hikes, but with crypto, such contagion events could cause outsized declines, given the market is tightly interlinked these days with a variety of inter-connected protocols and businesses,” he added.