Bitcoin Just Dropped To Its Lowest Level Since 2020
Further continuing the downward spiral for cryptocurrencies, the exchange value for Bitcoin has fallen below the $23,000 mark. The crypto coin is currently trading at its lowest price since December 2020, and nearly a third of the peak value that it hit in 2021. According to CoinDesk data, Bitcoin's exchange rate fell as low as $22,601 in the past 24 hours, at the time of writing. As per CoinMarketCap, the net market worth of the global cryptocurrency industry also fell below the $1 trillion mark for the first time since February 2021.
The crypto meltdown has been quite extraordinary, as the worldwide crypto industry saw over a trillion dollars erased from its market cap in a span of just six months leading into 2022 (via WSJ). The continued downfall of Bitcoin has worried even the most bullish investors, prompting fears that if the decline keeps happening, it would lead to a mass sell-off. Economists have already flagged risks over rising inflation and the impending hike in interest rates, while the likes of Elon Musk and Jamie Dimon have already raised alarms about a looming recession.
Industry-wide ripples from crypto's downward spiral
Crypto watchers and finance experts are linking Bitcoin's bad fortunes to two separate incidents — the collapse of Terra in May 2022 and Celsius going silent earlier this week. Terra, a stablecoin pegged to the U.S. dollar at an even exchange rate, imploded last month. Terra 2.0 has since popped up, but co-founder Do Kwon is already facing allegations of cashing out right in time. Celsius, a crypto depositing company that promises handsome returns from interests by loaning crypto deposits to other companies, shut down withdrawals a few days ago.
Citing "extreme market conditions," Celsius announced in an official blog post that it was putting a hold on all withdrawals and transfers by invoking a clause in the Terms of Use. The company, which accepts both Bitcoin and Ethereum deposits, is one of the most well-known names in the De-Fi (Decentralized Finance) industry. However, Celsius' business model has also attracted scrutiny, with skeptics calling it non-sustainable. While the company hasn't technically closed the shutters, its latest move is yet another sign that crypto's volatility is not really good for long-term business prospects.