Bitcoin tumbles as cryptocurrency sell-off accelerates

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Bitcoin tumbled on Wednesday to a new 18-month low, dragging smaller tokens down with it and spurring a sharp fall in crypto markets sparked by crypto lender Celsius freezing customer withdrawals.

The world’s largest cryptocurrency fell as much as 7.8% to $20,289, its lowest since December 2020. It has lost around 28% since Friday and more than half of its value this year. Since its record high of $69,000 in November, it has slumped about 70%.

Cryptocurrencies have been hit hard this week after US crypto lender Celsius froze withdrawals and transfers between accounts, stoking fears of wider fall-out in digital asset markets already shaken by the demise of the terraUSD and luna tokens last month.

Expectations of sharper US Federal Reserve interest rate hikes as inflation in the world’s biggest economy soars have also heaped pressure on risky assets from cryptocurrencies to stocks.

Crypto funds saw outflows of $102 million last week, according to Digital Asset Manager CoinShares, citing investors’ anticipation of tighter central bank policy. The value of the global crypto market has fallen under $900 billion, CoinMarketCap data shows, down from a peak of $2.97 trillion in November.

“The ripples running through the market haven’t stopped yet,” said Scottie Siu, investment director at Hong Kong-based Axion Global Asset Management. “I think we’re still in the middle of it unfortunately, the game isn’t over.”

Celsius has hired restructuring lawyers and is looking for possible financing options from investors, the Wall Street Journal reported, citing people familiar with the matter. Celsius is also exploring strategic alternatives including a financial restructuring, it said.

Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also fell. Ether, the second largest token, fell as much as 12% to $1,045, a new 15-month low.