The price of bitcoin fell sharply on Tuesday, as did the price of other cryptocurrencies, after a prominent cryptocurrency lender declared bankruptcy and froze all withdrawals from its platform, claiming “extreme market circumstances.”
It is the most recent high-profile failure of a bitcoin industry pillar. These financial meltdowns have wiped out tens of billions of dollars in investor assets, prompting urgent calls for regulation of the unregulated industry.
Bitcoin Price Plummeting
The price of BTC plunged 13.10 percent to $22,301.50 on Tuesday. Ethereum, the world’s second-largest cryptocurrency, is now trading at $1,197.70, down 12.75 percent. In the last 24 hours, BTC has dropped to $21,000, owing to heightened selling pressure after the rise of inflation in the United States. On Monday, BTC reached its lowest level since December 2020. Bitcoin might fall below US$20,000 if sellers are motivated, according to Edul Patel, co-founder of Mudrex.
“Bitcoin has dropped more than 49% since the start of the year. It is down 66% from its all-time high of US$68,990 in 2021,” Patel added. As the Federal Reserve increases interest rates to battle excessive inflation, investors have been dumping risky investments such as digital currencies and technology companies.
Celsius Network, a cryptocurrency lending platform, stated on Sunday that all deposits and transactions between accounts will be halted to “meet, over time, withdrawal commitments.” Celsius, which has over $10 billion in assets and 1.7 million subscribers, offered no indication in its statement when members might be able to access their accounts. The organization offers out exceptionally generous rates in exchange for consumers’ deposits, up to 19 percent on some accounts. Celsius invests in such funds and loans them out to earn money.
Lending platforms like Celsius have recently come under fire for offering returns than conventional markets could not sustain, prompting opponents to label them as basically Ponzi schemes. The sell-off in bitcoin is slowing, but traders are concerned that bad newsflow and potential interest rate rises in the United States may push the price lower.