Bitcoin crashed below $24,000 on Monday, a 65 percent decline from its all-time high of $69,000 in November, the lowest since December 2020 with over 180,000 traders losing approximately $520 million.
Over the weekend and into Monday morning, more than $200 billion had been wiped off the entire cryptocurrency market. The cryptocurrency market capitalization fell below $1 trillion on Monday for the first time since February 2021, according to data from CoinMarketCap.
The immediate trigger for the crypto crash appears to be a massive sell-off by investors amid heightened inflation fears. Investors are also continuing to stay away from riskier assets, which is reflected in the stock markets as well.
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Macro factors are contributing to the bearishness in the crypto markets, with rampant inflation continuing and the U.S. Federal Reserve expected to hike interest rates this week to control rising prices.
The wider cryptocurrency market began to fall after the Bureau of Labor Statistics released monthly inflation data from the consumer price index (CPI) on Friday morning, showing an 8.6 percent year-over-year increase in May. That was higher than Wall Street consensus estimates and set a new peak for the emerging era of high inflation in the 2020s (the previous peak was 8.5 percent).
Meanwhile, a crypto lending company, Celsius, has paused withdrawals for its customers, sparking fears of contagion into the broader market.
The world’s largest cryptocurrency, bitcoin, dropped below the $23,000 mark, according to CoinDesk data. At one point bitcoin fell about 17% to trade around $22,764.
As with bitcoin, so it is with every other altcoin posting declines of 20 percent and more in the last seven days as the selloff deepens. A major focus has been the CEL token, the native token of Celsius, which has now lost over 50 percent of its value in just 24 hours as the platform announced it was halting withdrawals.