Bitcoin crashes into crypto merger: thousands of investors are left with huge losses as panic erupts over the “wild west” market
By Calum Muirhead for the Daily Mail
Posted: 22:09, 13 June 2022 | Updated: 10:43 PM, June 13, 2022
Panic ripped through the cryptocurrency market yesterday when one of the largest companies in the sector was on the verge of collapse.
In a day of carnage for the industry, bitcoin crashed 20% to $ 23,000, its lowest level in 18 months.
The world’s largest digital currency has lost two-thirds of its value since reaching a high of $ 68,000 in November last year.
Crypto crash: in a day of carnage for the digital currency industry, bitcoin crashed 20% to $ 23,000, its lowest level in 18 months
Ethereum, the second most valuable digital currency in the world, fell 30% more and fell 75% from its high.
The sale, driven by the threat of rising interest rates as central banks struggle to control rampant inflation, came as the crypto lender Celsius Network prevented customers from withdrawing due to “extreme conditions.” of the market “.
The company’s own digital currency, known for its CEL ticker, fell 55 percent as a result of the suspension, as investors feared it might be on the verge of insolvency.
As the chaos spread, the Binance cryptocurrency prevented users from accessing their holdings in bitcoins.
The crisis has left millions of nurses at a loss.
Financial Conduct Authority (FCA) data released a year ago estimated that around 2.3 million investors in the UK owned cryptocurrency, equivalent to 4.4% of the adult population.
One in seven people who bought crypto during the pandemic borrowed money to do so.
Susannah Streeter, a senior investment and market analyst at Hargreaves Lansdown, said:
“It’s a compelling reminder that venturing into the wild west of cryptography is very risky and investing in these assets should only be at the edge of a portfolio, with money you can afford to lose.”
Hot water: Celsius founder Alex Mashinsky and his wife Krissy. Crypto lender has prevented customers from withdrawing due to “extreme market conditions”
Celsius is a decentralized financial platform, which means that it allows its users to borrow or lend their cryptocurrency in exchange for high rates of return.
The company said the move would put it in “a better position to meet, over time, its withdrawal obligations.”
Celsius, founded by technology entrepreneur Alex Mashinsky, is a major player in the crypto market, with around 1.7 million customers and, last month, had assets worth almost £ 10 billion.
The fall has also been painful for shareholders of companies linked to the cryptographic industry. Coinbase, the digital currency exchange traded on the Nasdaq, fell another 9.6%, bringing losses from last year’s high to almost 90%.
Bitcoin miner Argo Blockchain has also fallen nearly 90% since early last year.
The sale came as rising inflation, rising interest rates and the war in Ukraine forced investors to flee high-risk assets.
The latest volatility was fueled by worse-than-expected U.S. inflation data last Friday, raising fears that rising prices would be harder to eliminate than previously expected and paving the way for the Reserve Federal interest rates go up.
“As inflation proves to be an even more difficult opponent to beat than expected, bitcoin and ether continue to have a severe contusion in the ring,” Streeter said.
The value of digital currencies increased during the pandemic, as many people invested cash saved during confinement.
However, regulators have repeatedly warned about the risks of putting money on the crypto market, most of which are unregulated.
Last month, the FCA reiterated its warning that those who bought digital currencies “should be prepared to lose all the money” they invested. The watchdog warned that cryptographic products were not protected by financial compensation schemes.
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