Investors have Bitcoin amid fears of sharp rate hikes in the US
She announced that she would pause withdrawals and inter-account transfers due to “extreme market conditions.” There is a sell-off mood on the market, said Timo Emden from Emden Research.
Bitcoin fell below $25,000 for the first time since December 2020. The oldest cyber currency slipped at its peak by around 18 percent to $ 23,950. Ethereum went down even more significantly. The cryptocurrency was temporarily almost 30 percent lower at $ 1176. That was the lowest level since January 2021. According to stockbrokers, the crash brought back memories of the collapse in the price of the cyber currency TerraUSD, which shook the crypto industry in mid-May.
Concerns that the US Federal Reserve could raise interest rates even more than previously thought given the persistently high level of inflation sapped investors’ appetite for riskier assets such as cryptocurrencies at the beginning of the week. “Investors on both sides of the Atlantic are just saying goodbye to the notion that the US Federal Reserve is embarking on a manageable cycle of rate hikes,” said Emden.
At the beginning of May, the Fed took the largest interest rate hike in 22 years and raised the key interest rate by half a point to the new range of 0.75 to 1.0 percent. Investors fear that raising interest rates too much could stall the economy. Bitcoin has lost almost 50 percent of its value since the beginning of the year. The Fed is due to make another interest rate decision on Wednesday.
In the midst of this, Celsius Network’s announcement that it would suspend withdrawals and inter-account transfers accelerated the cyberforex slide. The company stated in a blog post, “We are taking this necessary action to stabilize liquidity and operations while taking steps to preserve and protect assets.”
Celsius Network lends cryptocurrencies, provides cryptocurrency-backed loans, and offers savings products to customers who invest their cybercurrencies with the company. On its website, the company advertises annual returns of up to 17 percent. As of May 17, the company had processed $8.2 billion in loans and had $11.8 billion in assets under management, according to the website.
Until November of last year, digital currencies continued to grow despite already high inflation.
Some market observers looked into Bitcoin