Binance-Celsius halted Bitcoin trading
Bitcoin and other cryptocurrencies fell further on Tuesday as investors fled riskier assets in expectation of substantial increases in interest rates to combat inflation.
Two of the world’s largest cryptocurrency exchanges banned operations on Monday as the broader market implosion proceeded apace.
The Celsius Network, which has 1.7 million clients, announced that “extreme market circumstances” have prompted it to temporarily block all withdrawals, crypto exchanges, and account transfers.
“We are taking this essential action for the sake of our whole community in order to stabilize liquidity and operations while we maintain and protect assets,” the firm stated in a blog post.
According to its website, the UK-registered corporation has over $3.7 billion in assets. It pays interest on bitcoin deposits and lends them out for profit.
“Celsius stopping withdrawals yesterday provided more negative momentum,” said Jeffrey Halley, senior market analyst, Asia Pacific, at Oanda. “I can only guess that the next psychologically significant milestone for bitcoin will be $20,000.”
After its epidemic boom turned to collapse, the cryptocurrency market has taken a beating in recent months. As the world’s leading central banks increased interest rates to combat soaring inflation, traders fled riskier investments, including volatile crypto assets.
Bitcoin, the world’s most valuable cryptocurrency, plummeted around 8% on Tuesday, falling below $23,000 for the first time. According to Coinbase statistics, it had lost around 25% of its value since Friday, placing it roughly 67 percent below its all-time peak in November last year, when it traded at about $69,000.
Ether, the second-most valued digital asset, fell 4%, bringing its losses since Friday to almost 32%. It has already lost around 75% of its value since November.
Binance, the world’s largest cryptocurrency exchange, temporarily halted bitcoin withdrawals on Monday. According to the firm, some transactions had “stuck” and were producing a backlog.
“The Binance team is working on a long-term solution to speed pending transactions on the bitcoin (BTC) network and avoid similar scenarios in the future,” the company stated in a statement.
Stablecoins, or cryptocurrencies connected to the value of more traditional assets, have also suffered. Tether, a popular stablecoin, severed its peg to the US dollar in May, putting an end to the notion that it could be used as a volatility hedge.
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TerraUSD, a riskier algorithmic stablecoin that utilized complicated code to link its value to the US dollar, crashed the same month, wiping off hundreds of investors’ investments. According to CoinMarketCap statistics, the currency was worth slightly more than $18 billion in early May before collapsing.
Celsius Network did not specify when consumers would be able to withdraw their deposits again, just that it would “take time.”
Meanwhile, governments are keenly monitoring the aftermath of the crypto meltdown and may take action to safeguard investors.
Last month, US Treasury Secretary Janet Yellen told the Senate, “There are considerable dangers involved with cryptocurrencies.” She stated that her agency was planning to provide a report on the subject.
Coinbase announced a $430 million first-quarter loss last month, as active monthly users fell 19%. This month, the corporation has implemented a recruiting freeze, and some employment offers may be revoked.
Earlier this month, Gemini stated it expects to lay off 10 percent of its workers, marking the first time the corporation has ever had to slash positions, Bloomberg News reported. Bitso, Buenbit, and Mercado Bitcoin have also reduced their employees.