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Highlights
- Bitcoin has dropped below $23,000, a new 18-month low.
- The global crypto market cap is below US$ 1 trillion.
- The prices of many cryptocurrencies have dropped to new lows in 2022.
The first half of 2022 has been awful for crypto, but few days have been as bad for the business that has grown up around digital currencies.
Trading platforms froze withdrawals on Monday, companies laid-off workers, and skeptical investors sold their crypto assets, bringing cryptocurrency's market cap below US$ 1 trillion, down from US$ 3 trillion in November last year.
Bitcoin has dropped below $23,000, a new 18-month low. At the time of writing, the price of Bitcoin had declined by 11.2 per cent in the last 24 hours to US$ 22,514.75 per token. Meanwhile, Ethereum, the second most valued cryptocurrency, had lost 8.2 per cent.
What triggered the crypto crash?
The immediate cause of the crypto meltdown appears to be a big sell-off due to recession fears and a halt in withdrawals by cryptocurrency lending firm Celsius.
Celsius Network stunned the market early Monday when it announced that it had halted all withdrawals, swaps, and account transfers due to market conditions. The platform also stated to the Celsius Community that the decision was made to stabilise liquidity and operations.
Investors are also continuing to maintain a distance from risky assets. The significant decrease in the price of virtual currencies indicates that investors' risk appetite is low, and they're wary about high-risk investments.
Locking crypto assets worth billions of dollars under Celsius' management has raised questions about the platform's viability. The announcement sent shockwaves across the crypto community, recalling what happened in May when a stablecoin project lost billions of dollars in value, dragging the rest of the sector down with it.
Bottom line
Seeing the current market situation, probably the most frequently asked questions are: Is this the end of the crypto market, or will the cryptocurrencies make a comeback?
The global cryptocurrency market has plummeted in the past few months, with several prominent crypto prices hitting new lows in 2022. During the current slump, the price of one of the most popular cryptos (LUNA) has dropped to virtually nothing.
Despite the enormous drop, this is most likely not the worst situation the crypto community has ever faced. Some analysts believe that cryptocurrencies can expect a recovery when the world recovers from the global economic disaster.
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