Bitcoin has dropped below $25,000 for the first time in 18 months.
Bitcoin fell to an 18-month low of under $25,000 on Monday as investors avoided risky assets in the face of a ferocious global market selloff, months after the cryptocurrency reached a record high.
The unit was also hit hard by the news that cryptocurrency lending platform Celsius Network had paused withdrawals, citing volatile market conditions.
Since Friday, when data showed US inflation at a new four-decade high, investors have fled to safer assets such as the dollar, global stock markets have plummeted.
“It is not surprising to see such a strong downturn given that we have seen an increased correlation over the last few years between traditional stocks, which have also recently tanked, and the dollar.”
The world’s most popular cryptocurrency dived about 10 per cent to hit $23,794 in morning London deals, striking a level last seen in December 2020.
Since reaching a record high of $68,991.85 in November 2021, the virtual unit’s value has dropped by 65 percent.
Investors sought safety on Monday, with the US Federal Reserve expected to aggressively raise borrowing costs further to combat runaway inflation.
The news from Celsius Network has accelerated Bitcoin’s decline.
“Today, we are announcing that Celsius is temporarily suspending all withdrawals, swaps, and transfers between accounts,” the platform said in a statement.
Celsius made the decision “due to extreme market conditions,” according to the company.
The total value of customer deposits had already dropped by more than half to less than $12 billion.
The global cryptocurrency market peaked at $2.9 trillion in November 2021, but has since slowed.
“As inflation proves to be an even more difficult foe to overcome than expected, Bitcoin and Ether continue to suffer severe bruising in the ring,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“They are prime victims of the flight away from risky assets as investors worry about global consumer price inflation.”
In a sign of cryptocurrencies’ growing importance, two countries, El Salvador and the Central African Republic, have taken the risk of adopting bitcoin as legal tender, despite strong criticism from international financial institutions.
