Bitcoin plunges to its lowest level since late 2020

Bitcoin plunged to its lowest level in 18 months on Monday in a market with no risk appetite, also suffering from the suspension of withdrawals on investment platform Celsius.

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As stock markets around the world see red and investors flock to the safe-haven dollar, “probably the biggest carnage in the crypto world is happening,” said Jeffrey Halley, an analyst at Oanda.

Bitcoin sees its price fall more than 10% to $24,580 around 4:40 a.m., its lowest level since December 2020 and a fall of more than 65% since its all-time high in November 2021.

While the cryptocurrency market was worth more than $3 trillion at its peak seven months ago, it is approaching the $1 trillion mark, according to the Coingecko website, which lists more than 13,000 different cryptocurrencies.

In 2021, this fledgling sector had increasingly attracted more traditional financial players, whose appetite for risk was fueled by ultra-loose policies from central banks around the world.

But the US Federal Reserve’s (Fed) interest rate hike, which is trying to combat runaway inflation, is weighing on markets.

Additionally, Bitcoin’s decline accelerated “after the Celsius platform ‘suspended’ withdrawals,” comments Mark Haefele, an analyst at UBS.

This company, which, according to its website, managed $12 billion in assets in mid-May, notably offered its users the opportunity to place their “historic” cryptocurrencies, such as bitcoin and ether, to invest in new cryptocurrencies.

In October, Celsius notably raised $400 million from Caisse de Depot et Placement du Québec (CDPQ), which was delighted to partner with the “world’s leading cryptocurrency lender.”

“Due to extreme market conditions, we are suspending all withdrawals and inter-account transfers,” the platform announced on Monday.

“There are fractures in the crypto space and it’s likely to get worse,” warns analyst Neil Wilson.

In early May, Terra, a cryptocurrency reportedly priced against the dollar, plunged, worrying investors.

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