The most popular cryptocurrency has been in free fall for several weeks now.
It’s a real debacle.
Bitcoin fell below $20,000 and $19,000 for the first time since 2020, marking a week in which panic seems to be dominating the cryptocurrency market.
The price of Bitcoin was at $18,766.13 at last check, according to data firm CoinGecko. The most popular digital currency was down more than 9% in the last 24 hours and 35.7% in the last seven days.
The price of Bitcoin was last seen at these levels around December 12, 2020. But since then it had been a meteoric rise until a crash began starting this year.
Ether, the second cryptocurrency by market value, also fell below the symbolic threshold of $1,000. The native token of the Ethereum platform was worth $970.50, down 10.1% in the past 24 hours and down 41.6% in the past seven days.
Bitcoin has lost 72.7% of its value since hitting an all-time high of $69,044.77 on Nov. 10. Ether for its part lost almost 80% of its value compared to its record of $4,878.26 crossed the same day.
So it’s no surprise that the crypto market’s valuation has lost nearly $2.3 trillion to $866 billion since hitting a high of $3 trillion in November.
The reasons for the crash are the same: fears of recession are pushing investors to liquidate risky assets. Cryptocurrencies and tech groups are considered as such.
‘Terrible’ News Cycle for Crypto
The crypto market is also shaken by various scandals.
The first is the sudden collapse of sister tokens UST and Luna, despite their founders promising that their technology was solid and viable.
The second scandal is the decision, on June 12, by crypto lender Celsius Network to freeze withdrawals and other transactions from its platform. Rumors have since been circulating about a potential insolvency from Celsius, which has still not dispelled them.
Then, on June 17, crypto financial services company Babel Finance said it was temporarily suspending withdrawals and redemptions in the latest blow to the cryptocurrency sector.
“Due to the current situation, Babel Finance is facing unusual liquidity pressures,” the firm said in a statement. “We are in close communication with all related parties on the actions we are taking in order to best protect our customers.”
During this period, the statement continued, “redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately.”
Babel Finance describes itself as “one of the largest service providers to institutions in the crypto financial markets.”
“The news flow has been terrible for crypto,” said Edward Moya, senior market analyst for the Americas with Oanda.”The Texas Securities Board is investigating the Celsius network‘s decision to suspend withdrawals and everyone is expecting restrictive guidelines to quickly make life difficult for crypto-lending firms.”
Moya said that Bitcoin declined “as risk appetite left Wall Street as investors became worried of a much quicker deterioration for the US economy.”
“Surging recession fears are crippling appetite for risky assets and that has crypto traders remaining cautious about buying bitcoin at these lows,” he said.