Bitcoin Rises From 18-Month Low As Crypto Market Stabilizes

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LONDON/NEW YORK, June 15 (Reuters) – Bitcoin recovered on Wednesday after plunging to an 18-month low, buoyed by the U.S. Federal Reserve’s tough stance on inflation, even amid a market collapse this week after crypto lender Celsius froze customer withdrawals.

The world’s largest cryptocurrency fell 7.8% to $20,079.72, its lowest level since December 2020. It has lost around 33% against the US dollar since Friday, falling more than 50% since the beginning of the year. It has fallen around 70% from its record high of $69,000 in November.

Bitcoin was last down 1.31% at $21,669.37.

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The digital currency sector took a beating this week after Celsius froze withdrawals and transfers between accounts, stoking fears of contagion in markets rocked by the demise of terraUSD and luna tokens last month.

Cryptocurrencies were supported as the S&P 500 rallied after a policy announcement by the Fed to raise interest rates, ending a five-session losing streak.

The Fed raised its target interest rate by three-quarters of a percentage point, its biggest rate hike since 1994. Read more

Crypto funds saw outflows of $102 million last week, according to digital asset manager CoinShares, citing investors’ anticipation of tighter central bank policy.

The value of the global crypto market fell 70% to less than $900 billion from a peak of $2.97 trillion in November, according to data from CoinMarketCap.

Bitcoin so far in 2022

“There are parts of the broader crypto ecosystem that are facing pretty harsh judgment,” said Mikkel Morch, executive director of digital asset hedge fund ARK36. “As the reality of the bear market begins to set in, the hidden levers and structural weaknesses of projects that only worked when prices rose are finally coming to light.”

Celsius has hired restructuring lawyers and is seeking possible financing options from investors, The Wall Street Journal reported, citing people familiar with the matter. Celsius is also exploring strategic alternatives, including financial restructuring, he said.

Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also fell. Ether, the second-largest token, fell to $1,013, the lowest since January 2021, and was last down 1.22% at $1,172.76.

The chaos in the crypto market has spread to other businesses, with a number of exchanges downsizing.

The major US exchange Coinbase Global Inc (COIN.O) announced on Tuesday that it would cut around 1,100 jobs, or 18% of its workforce. Gemini, another US exchange, said this month it would cut 10% of its workforce. Read more

Yet others continue to hire. Binance, the world’s largest exchange, said it was hiring for 2,000 positions, and US exchange Kraken said it had 500 vacancies. Read more

“Hang on,” Binance CEO Changpeng Zhao tweeted.

Crypto hedge fund Three Arrows, faced with talk on social media it is facing liquidation issues, said it was committed to resolving the issues. Read more

US crypto broker Genesis also sought to allay investor concerns, saying its balance sheet was strong and its lending business continued to meet client demand despite high market volatility. Read more

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Reporting by Tom Wilson in London, Gertrude Chavez-Dreyfuss in New York and Hannah Lang in Washington; Additional reporting by Alun John in Hong Kong Editing by Jason Neely, Mark Potter and David Gregorio

Our standards: The Thomson Reuters Trust Principles.


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