The Celsius and Voyager bankruptcy filings have raised questions about what happens to investors’ crypto when a platform goes down.
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Bitcoin fell below $20,000 on Monday as investors dumped risky assets after the Federal Reserve affirmed its commitment to aggressive tightening.
The world’s largest digital currency fell 5% from Friday’s close to an overnight low of $19,526, a level not seen since July 13, according to data from Coin Metrics. Other major digital tokens also sold off, with Ether falling to $1,423, its lowest level in a month.
The sharp drop in cryptocurrencies coincided with a sharp sell-off in US equities, sparked by Fed Chairman Jerome Powell’s strong pledge to halt inflation in a speech in Jackson Hole, Wyoming. The Dow Jones Industrial Average lost 1,000 points on Friday after Powell said he expects the central bank to continue raising interest rates in a way that will cause “some pain” for the economy. American economy. Shares sold off again on Monday.
“Bitcoin weakened after Fed Chairman Powell was quick to reiterate that the Fed will tighten policy to bring inflation down,” said Edward Moya, senior market analyst at Oanda. “Risk assets are in trouble as Powell’s fight against inflation will remain aggressive even if it triggers an economic slowdown.”
Bitcoin fell more than 3% last week for its third negative week in four. The cryptocurrency is down more than 50% this year and remains within 70% of its all-time high price of $68,990.90 reached in November.
The crypto market has been plagued by a number of issues, including the collapse of the algorithmic stablecoin terraUSD, which triggered a series of events that led to the bankruptcy of lending platform Celsius and hedge fund Three. Arrows Capital.