Bitcoin hits lowest level in 18 months

LONDON: Bitcoin tumbled on Monday to an 18-month low of under $25,000 as investors shunned risky assets in the face of a vicious global markets selloff, months after the cryptocurrency hit a record high.

The unit took a heavy knock also from news that cryptocurrency lending platform Celsius Network paused withdrawals, citing volatile conditions.

World stock markets have plunged since Friday, when data showed United States inflation at a fresh four-decade high, increasing recession fears and sending investors running for safer assets like the dollar.

“It is not very surprising to see such a strong downturn as we have noticed an increased correlation over the last few years between traditional stocks, which have also tanked recently, and the cryptocurrency market,” XTB chief market analyst Walid Koudmani said.

The world’s most popular cryptocurrency dipped about 10 percent to hit $23,794 in morning London deals, hitting a level last seen in December 2020.

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The virtual unit has collapsed by 65 percent in value since reaching a record peak of $68,991.85 last November.

Investors on Monday sought safety with the Federal Reserve seen as likely to aggressively ramp up borrowing costs further to combat runaway inflation.

Bitcoin’s decline accelerated after Celsius announced the news.

“Today, we are announcing that Celsius is pausing all withdrawals, swap and transfers between accounts,” the platform said in a statement.

Celsius made the move “due to extreme market conditions,” it added.

The total value of customer deposits had already shrunk by more than half to below $12 billion in May compared with the end of last year.

Koudmani said further falls for Bitcoin “may trigger a cascading effect of liquidations of hedging positions” taken against the cryptocurrency.

The global crypto market, composed of other virtual currencies that are tanking, such as Ethereum, is worth about $1 trillion, according to crypto data aggregator CoinGecko.