- Crypto Crash Extends
- Now Binance “Pauses” Withdrawals Too
- Celsius Update: Still Not Allowing Withdrawals
Crypto Crash Extends
The plunge lower in cryptocurrencies seen since Sunday shows no immediate sign of abating, as the sell-off extended through Monday into Asian trading hours on Tuesday. The world’s largest cryptocurrency, Bitcoin, extended losses down below the $21,000 level, but managed to post a modest bounce from above a psychological target at $20,000. Bitcoin has now fallen nearly 70% from its record peak from November 2021, with other cryptocurrencies suffering similar losses.
This extreme market turbulence and fragility comes in the wake of surging inflation data from around the globe, highlighted by last Fridays’ release of US Consumer Price Index (CPI) data, which is still running very hot, with the data coming in above the forecasts of economists. The fear is that the high inflation numbers will push global Central Banks into even more aggressive rate increases, and eventually push the global economy into recession. And critically, tomorrow (Wednesday 15th June), we get the latest interest rate decision from the US Federal Open Market Committee (the FOMC), and although a 0.50% rate increase was fully anticipated, markets are now starting to price in a more aggressive hike of possibly 0.75%, if not at this meeting, then at their next meeting in July.
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Of further concern for cryptocurrency markets is that US equity index futures have managed to bounce somewhat into the Tuesday session, having also suffered severe losses on Monday, whilst cryptocurrencies endured further losses.
Now Binance “Pauses” Withdrawals
As we highlighted in our note on Tuesday, the fears concerning the above-mentioned inflationary pressures and rate hikes were compounded by Celsius, a crypto lending company, pausing all withdrawals (as we update below). But to compound, this additional worry, Binance, the world’s largest cryptocurrency exchange, has “paused” Bitcoin withdrawal. Binance stated that its halt on trading Bitcoin was due to a “stuck transaction”, but this development does little to allay fears of contagion as hundreds of billions of dollars are being wiped off of the cryptocurrency market on a daily basis.
Celsius Update: Still Not Allowing Withdrawals
The cryptocurrency lender Celsius which is similar to a bank has stated: “We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations.” They have gone on to confirm that their 1.7 million users would still be accruing rewards, even while their accounts were frozen.