In Asia, Bitcoin tumbled below $21,000 on Tuesday before bouncing back somewhat, continuing its decline as investors liquidated risk assets.
At around 5:13 a.m. ET, bitcoin fell more than 7%, according to Coindesk data, to $22,531.22. Bitcoin is currently at its lowest point since late 2020. Other digital currencies like ether dropped significantly as well.
On Monday, the market capitalization for crypto fell below $1 trillion for the first time since Feb. 2021, according to CoinMarketCap data. Since Sunday evening, around $200 billion has been lost from the market.
“Everything is burning right now, whether it’s equities, crypto assets, or anything else.” Nirmal Ranga, CEO of cryptocurrency exchange ZebPay, said.
“What you are seeing in the market is … trepidation, uncertainty, and doubt,” he told CNBC’s “Street Signs Asia.” “Markets technically appear to be oversold; there must be a floor that we’ll hit in bitcoin in the future.”
On Monday, crypto assets took a hit due to the closing of Celsius’s crypto lending platform, with worries about a solvency issue at the firm spilling over into other areas of the market.
“We are engaged in extreme market conditions,” reads a statement from the bank. “Due to these exceptional circumstances and in order to stabilize liquidity and operations, we have implemented all of our planned procedures as follows: Withdrawals, transfers, and swaps between accounts will be halted for the time being.”
The firm said it’s taking this step now to better position Celsius to fulfill its withdrawal obligations in the future.
Binance, one of the world’s biggest cryptocurrency exchanges, has halted withdrawals.
Meanwhile, Binance, the world’s largest cryptocurrency exchange, delayed bitcoin withdrawals for nearly three hours “due to a stuck transaction that caused a backlog.”
The cryptocurrency market’s slump has also affected BlockFi, which slashed jobs as a result of the market turmoil.
The cryptocurrency sell-off follows a widespread flight from riskier assets amid worries about a worldwide recession.
According to CNBC’s Steve Liesman, policymakers at the Federal Reserve are now considering a 75-basis-point rate hike later this week. That’s larger than the 50-basis-point boost many investors had anticipated.
Future earnings for growth assets seem less appealing as rates rise. Bitcoin has dropped nearly 70% from its all-time high in November 2021.