Bitcoin continues to tumble this week to trade just above $20,000 on Wednesday as the cryptocurrency sell-off shows little sign of abating.
The world’s most valuable cryptocurrency has fallen about 15% since Monday, and by nearly a third since Friday, according to data from crypto exchange Coinbase. The coin has lost around 70% of its value since its all-time high in November last year, when it traded around $69,000.
Falling below the $20,000 barrier would be a sobering milestone for a market that boomed during the pandemic, analysts say.
“A move below $20,000 would be a massive psychological blow and could send bitcoin further into a tailspin,” Craig Erlam, senior market analyst at Oanda, a foreign exchange firm, said in a note on Tuesday.
Ether, the second-most valuable digital coin, slipped 12% on Thursday. It has now lost 78% of its value since its November peak.
As the world’s major central banks hike interest rates to bring inflation under control, traders have dumped their riskier investments, which include volatile crypto assets.
The embattled industry is bracing for further pain.
Coinbase said on Tuesday that it would lay off about 1,000 of its staff — making up 18% of its workforce — citing fears of an impending economic downturn and a “crypto winter.” The company’s stock has taken a hammering since its initial public offering in April last year. Once worth almost $100 billion, it is now valued at less than $12 billion.
The Celsius Network, one of the world’s biggest cryptocurrency lenders, announced on Monday that “extreme market conditions” had forced it to temporarily halt all withdrawals, crypto swaps and transfers between accounts.
The company told its 1.7 million customers that has taken the decision to “stabilize liquidity and operations while we take steps to preserve and protect assets.” It said it would “take time” before customers were allowed to withdraw deposits again.
Binance, the world’s largest cryptocurrency exchange, suspended withdrawals on its bitcoin network for a few hours on Monday after some transactions got “stuck” and caused a backlog.
— Jordan Valinsky contributed to this report.