Cryptocurrency Market Sinks After Latest DeFi Blowup

Cryptocurrency_Bitcoin

The world’s largest cryptocurrency dropped 7.8% to $20,289, its lowest level since December 2020. Since Friday, it has lost nearly 28% of its value, and it has lost more than half of its value this year.

It has dropped over 70% after reaching a record high of $69,000 in November.

The United States crypto lender Celsius suspended withdrawals and transfers between accounts this week, sparking worries of a larger impact in digital asset markets already jolted by the loss of the TerraUSD and Luna coins last month.

The industry’s crisis is spreading as traders leave the asset class that has long been associated with speculative trading and quick money. With prices continue to fall, more people are predicting that losses will worsen.

Expectations of more aggressive interest rate hikes by the US Federal Reserve as inflation in the world’s largest economy rises have put pressure on riskier assets like stocks and cryptocurrencies.

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The Wall Street Journal said, citing persons familiar with the situation, that Celsius has retained restructuring attorneys and is searching for new funding options from investors.

Celsius is also looking into strategic options, such as financial restructuring, it added.

Smaller cryptocurrencies, which often move in lockstep with Bitcoin, also dropped.

The second-largest coin, Ether, dropped as much as 12% to $1,045, a fresh 15-month low.

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