Bitcoin sinks to fresh 18-month low as crypto meltdown deepens (updated)

Genesis Healthcare

15/06/2022 08:56

(Adds new comment, Three Arrows statement, Genesis, byline, NEW
YORK dateline, updates prices)
    By Tom Wilson and Gertrude Chavez-Dreyfuss
    LONDON/NEW YORK, June 15 (Reuters) - Bitcoin slumped on
Wednesday to a new 18-month low, dragging smaller tokens down
with it and deepening a market meltdown sparked by crypto lender
Celsius this week freezing customer withdrawals.
    The world's largest cryptocurrency fell as much as 7.8% to
$20,079.72  BTC=BTSP , its lowest since December 2020. It has
lost about 33% of its value against the U.S. dollar since
Friday, dropping more than 50% since the beginning of the year.
It has slumped about 70% from its record high of $69,000 in
November.
    Bitcoin was last down 3.4% at $21,336.
    The digital currency sector has been pummelled this week
after U.S. crypto lender Celsius froze withdrawals and transfers
between accounts, stoking fears of contagion in markets already
shaken by the demise of the terraUSD and luna tokens last month.
    Expectations of a 75 basis-point interest rate hike from the
U.S. Federal Reserve later on Wednesday amid blistering
inflation have also pressured risky assets from cryptocurrencies
to stocks. 
    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 has tumbled 70% to
under $900 billion from a peak of $2.97 trillion in November,
CoinMarketCap data shows.     
    "Some parts of the broader crypto ecosystem are facing a
rather harsh reckoning," said Mikkel Morch, executive director
at digital asset hedge fund ARK36. "As the reality of the bear
market starts to settle in, the hidden leverages and structural
weaknesses of projects that only worked when the prices went up
are finally brought to light."
    Celsius has hired restructuring lawyers and is looking for
possible financing options from investors, the Wall Street
Journal reported, citing people familiar with the matter.
Celsius is also exploring strategic alternatives including a
financial restructuring, it said.  urn:newsml:reuters.com:*:nL4N2Y2035
    Smaller cryptocurrencies, which tend to move in tandem with
bitcoin, also fell. Ether  ETH=BTSP , the second largest token,
fell to as low $1,013, the lowest since January 2021, and was
last down 8.1% at $1,108.
    The chaos in the crypto market has spread to other
companies, with a number of exchanges slashing workforces. 
    Major U.S. exchange Coinbase Global Inc  COIN.O  said on
Tuesday it would cut about 1,100 jobs, or 18% of its workforce.
Gemini, another U.S. exchange, said this month it would cut 10%
of its workforce.  urn:newsml:reuters.com:*:nL4N2Y12LW
    Still, others are continuing to hire. Binance, the world's
largest exchange, said on Wednesday it was hiring for 2,000
positions, and U.S. exchange Kraken said it had 500 roles to
fill.  urn:newsml:reuters.com:*:nL4N2Y22EZ
    "Hunker down," tweeted Binance CEO Changpeng Zhao. 
    Crypto hedge fund Three Arrows, amid social media chatter it
is facing liquidation issues, said it was committed to working
things out.  urn:newsml:reuters.com:*:nL4N2Y22MK
    U.S. crypto broker Genesis also sought to ease investor
concerns on liquidity after what happened to Celsius. Genesis
said its balance sheet was strong and its lending business
continued to meet client demand despite elevated market
volatility.  urn:newsml:reuters.com:*:nL8N2Y23XT

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Bitcoin so far in 2022    https://tmsnrt.rs/3tB78rc
FOCUS-How crypto lender Celsius stumbled on risky bank-like
investments     urn:newsml:reuters.com:*:nL1N2Y1252
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Tom Wilson in London and Gertrude Chavez-Dreyfuss
in New York  Additional reporting by Alun John in Hong Kong
Editing by Jason Neely and Mark Potter)
 ((gertrude.chavez@thomsonreuters.com; 646-301-4124; Reuters
Messaging: rm://gertrude.chavez.reuters.com@reuters.net))