New York (The Times Groupe)- Bitcoin sank to about $17,800 and ether to about $897 on Saturday afternoon at around 4:15 E.T., as the crypto sell-off accelerated. As both cryptocurrency prices breach symbolic price barriers, the world’s two most popular cryptocurrencies are down more than 35% in the past week.
Bitcoin bounced back to around $18539 and ether was trading at about $995 just after 8 p.m. ET.
Several macroeconomic factors have contributed to the carnage in the crypto market, including spiraling inflation and a succession of Fed rate hikes. Blue chip cryptos have also tracked equities lower. It does not help that crypto firms are laying off large swaths of employees, and some of the biggest names in the industry are facing solvency meltdowns.
Bitcoin peaked in November at $68,789.63. Ethereum peaked at $4,891.70 that same month. Bitcoin last traded at this low around December 2020.
Bitcoin dropped as much as 17% at one point in the day as crypto prices plummeted. We were experiencing a crypto winter.
Celsius, a major crypto staking and lending platform, shocked the market when it announced all withdrawals, swaps and transfers between accounts were paused due to “extreme market conditions.” In a memo to its Community, Celsius said the decision was designed to “stabilize liquidity and operations.”.”
With $12 billion in crypto assets under management, Celsius effectively locked up its solvency. The news sent ripples through the crypto industry, reminding some of what happened in May, when a failed dollar-pegged stablecoin project lost $60 billion in value and pulled the wider crypto market down with it.
Users of Celsius could earn up to 18.63% on their deposits. It’s like a bank’s product without any of the regulatory safeguards.
The crazy yields were eventually questioned.
“This risk certainly seems as if it is just the beginning,” said John Todaro, Needham’s vice president of crypto assets and blockchain research.
“On the decentralized side, a lot of these DeFi protocols, a lot of those positions are overcollateralized, so you should not see the underfunding situation that could occur with centralized borrowers and lenders. Despite that, you could still see a lot of liquidations of collateral on DeFi protocols,” concluded Todaro. cryptocurrency price