As the crypto collapse worsens, Bitcoin drops to $20,289, a new 18-month low

16 Jun 2022 , 09:51 AM

Bitcoin fell to a fresh 18-month low on Wednesday, bringing smaller tokens down with it and worsening a market crisis caused by crypto lender Celsius suspending customer withdrawals earlier this week.

The world’s most valuable cryptocurrency dropped 7.8% to $20,289, its lowest level since December 2020. Since Friday, it has lost roughly 28% of its value, and it has lost more than half of its value this year. It has dropped over 70% since reaching a high of $69,000 in November.

Expectations of more aggressive interest rate hikes by the US Federal Reserve as inflation in the world’s largest economy rises have put pressure on risky assets ranging from cryptocurrencies to stocks.

According to digital asset management CoinShares, crypto funds suffered withdrawals of $102 million last week, owing to investors’ expectations of stricter central bank policy.

According to CoinMarketCap data, the global crypto market’s value has dropped 70% to around $900 billion from a record of $2.97 trillion in November.

Smaller cryptocurrencies, which usually move in lockstep with bitcoin, also dropped. The second-largest coin, Ether, dropped as much as 12% to $1,045, a new 15-month low. The crypto market’s instability has expanded to other businesses, with a number of exchanges laying off employees.