Bitcoin falls below $21,000 and hits new 18-month low

Bitcoin falls below $21,000 and hits new 18-month low

Cryptocurrency exchanges began announcing job cuts.

Bitcoin fell this Wednesday up to 7.8%, under $21,000 and reached a new minimum of 18 monthsfollowing the widespread flight from risk assets in the world, which led to the suspension of withdrawals in some of the main crypto exchange platforms.

The world’s largest cryptocurrency fell to $20,289the lowest since December 2020, according to the ANSA agency.

In this sense, Bitcoin lost about 28% since Friday and more than half its value this year.

Bitcoin lost about 28% since Friday and more than half its value this year

Likewise, it fell about 70% from its historical maximum of US$ 69,000 last November.

Bitcoin’s crash also drags smaller tokens (virtual currencies) down, and deepens the market meltdown triggered in the past week by crypto lender Celsius.

The digital currency sector has been hit after Celsius’s freezing of withdrawals and transfers between accounts by Celsius, fueling fears of contagion in markets already shaken by the disappearance of other tokens.

The collapse is driven by the imminent announcement of rate hikes by the US Federal Reserve (FED).

The FED, which increased its reference interest rate by 0.25% in March and 0.50% last month, placing it in a range of 0.75% to 1%, will announce a new hike this Wednesday, which the market is already betting that it could be broader than expected and reach 75 percentage points.

These increases affect the riskiest assets such as shares -especially technology ones- and the cryptocurrencies themselves as debt bonds become more attractive.

To this was added on Monday the “corralito” arranged by the cryptocurrency lender Celsiuswhich stopped the withdrawals and transfers of its clients.

The measure sharpened fears of a lack of solvency of the firm, and generated a contagion effect to the rest of the market.

Since November 2021 when it peaked at $67,617, bitcoin has lost more than a third of its value with a 65% retracement while the entire cryptocurrency market capitalization has fallen from $3 trillion to $940 million. .

Faced with the collapse of the cryptocurrency market, some of the representative companies in the sector began in recent days to announce cuts and layoffs.

BlockFia cryptocurrency lender whose workforce grew from 150 employees at the end of 2020 to more than 850, announced on Monday the dismissal of 20% of its staff, according to the Bloomberg agency, because of what its CEO, Zack Princeconsidered as a “dramatic change in macroeconomic conditions”.

In the same way, Crypto.coma firm from Singapore that, with the “boom” of the market, became a sponsor of the next World Cup in Qatar and of Formula 1, and made commercials with the actor Matt Damon and the basketball player Lebron Jamesreported the dismissal of 260 workers, which represents 5% of its staff.

The cuts also reached Geminiwith a layoff of 10%, and the platform coinbasewhich after announcing the freezing of its contracts on June 2, fired 18% of its staff, which totals 5,000 employees.

Likewise, goodbitone of the main platforms in Argentina, laid off 45% of its staff at the end of May, reducing its workers from 180 to 100.



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