Representations of ripple, bitcoin, ether and litecoin virtual currencies can be found in this chart on the PC motherboard, February 14, 2018. REUTERS / Dado Ruvic / File Photo
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LONDON / HONG KONG, June 20 (Reuters) – The cryptocurrency industry was on edge on Monday as Bitcoin struggled to stay above a key level, with investors fearing problems with key crypto players could unleash widespread market turmoil.
Bitcoin, the world’s largest cryptocurrency, traded at an index level of $ 20,000 in early London trading hours – its peak in 2017 over its previous record.
Bitcoin fell to $ 17,592.78 on Saturday, below $ 20,000 for the first time since December 2020. The cryptocurrency sector has lost almost 60% of its value this year and 37% this month alone in the recent downturn.
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Its decline has been followed by problems for many major industries. Market players said further declines could have a knock-on effect as other crypto investors are forced to sell their shares to meet margin legs and offset losses.
Crypto Hedge Fund Three Arrows Capital, which is exploring options including selling assets and bailing out another company, its founders told the Wall Street Journal in a story released Friday that the same day Asian-centric crypto lender Babel Finance will stop withdrawing. read more [nL4N2Y42I2]
The US-based Celsius Network said it would stop customer withdrawals this month. In a blog on Monday, Celsius said it will continue to work with regulators and officials, but will suspend its customer question and answer sessions. read more
“A lot of loans are being withdrawn from the system, and if lenders absorb losses from Celsius and the three arrows, they will reduce the size of their future credit books, which means the full amount of credit available in the crypto ecosystem will be reduced.” .
“In terms of the domino effect of bankruptcies and liquidations, it looks to me like 2008,” Farting said.
Small tokens that usually move in conjunction with Bitcoin were also affected. The No. 2 token ether was $ 1,0752, down below its own index of $ 1,000 over the weekend.
The decline in crypto markets coincided with the decline in stock markets as US stocks experienced the biggest weekly percentage decline in two years, amid fears of rising interest rates and the growing potential of a recession.
Bitcoin’s moves follow a similar pattern to other risk assets such as technology stocks.
The total crypto market capitalization is approximately $ 877 billion, according to the price base Coinmarketcap, which fell to a peak of $ 2.9 trillion in November 2021. read more
The fall of staplecoins – a type of crypto designed to hold a fixed value – suggests that investors are pulling money out of the sector as a whole. read more
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Report by Alun John, editing by Sri Navaratnam and Ed Osmond
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