Bitcoin has fallen more than 10%, below $ 25,000 for the first time since December 2020.
Celsius Network, a major U.S. cryptocurrency lending company, froze withdrawals and transfers, citing “extreme” conditions.
The move caused cryptocurrencies to fall, with their value below $ 1 trillion for the first time since January last year.
Bitcoin fell to $ 23,476 (£ 19,300) after Monday’s announcement.
Ether, the second largest witness after bitcoin, fell 16% to $ 1,177 (£ 967), its lowest level since January 2021.
Binance, one of the world’s largest cryptocurrency exchanges, halted bitcoin withdrawals, with CEO Changpeng Zhao blaming a “blocked transaction” that was causing a delay.
He said the funds were safe.
Susannah Streeter, a senior investment and market analyst at Hargreaves Lansdown, said: “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.
“They are the main victims of the leakage of risky assets, as investors are concerned about the spiral of consumer prices around the world.”
On Friday, it was announced that US inflation hit a new 40-year high of 8.6% in May amid rising energy and food costs.
The figure was higher than expected, overwhelming hopes that inflation would have peaked.
Rising prices in the U.S. sparked fears that the Federal Reserve, the U.S. central bank, could raise interest rates even further.
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Speculation is growing that rates could rise three-quarters of a percentage point later this week for the first time since 1994.
Higher interest rates can be daunting for investors because they make loans more expensive.
On Monday, US stocks opened sharply lower, with the S&P 500 nearing a 20% drop from a high earlier this year.
The S&P 500 was down 2.7% on the first price, while the Dow Jones Industrial Average fell 855 points, or 2.7% at 11.15am Eastern time (16.15pm UK). The Nasdaq compound fell 3.2%.
The FTSE 100 fell 1.7% and in Europe, the German DAX lost 2.7%. The French CAC 40 fell 2.7%.
In Asia, rates fell by at least 3% in Seoul, Tokyo and Hong Kong, fueled by concerns about rising COVID-19 cases and tougher restrictions in China.