Bitcoin and other cryptocurrencies fell over the weekend and on Monday as high inflation forced investors to flee and exited major trading platforms.
At one point on Monday morning, bitcoin was below $ 24,000, down 20 percent from Friday and enough to reduce the value of the world’s dominant cryptocurrency to its lowest point since December 2020.
The sell-off caused a major cryptocurrency exchange called Celsius to suspend withdrawals on Sunday night, meaning investors can’t take what’s left of their money. “We are taking this action today to put Celsius in a better position to meet its withdrawal obligations over time,” said the stock exchange, which had approximately $ 25 billion in assets at peak estimates last year.
Quebec’s retirement plan, Caisse de dépôt et placement du Québec, is one of Celsius’ financial backers after participating in a $ 400 million investment in the platform last November.
“Blockchain technology has the potential to disrupt several sectors of the traditional economy,” Caisse said at the time. “As digital assets grow in adoption, we intend to seize the right opportunities as we work with our regulated industry partners.
Caisse did not immediately respond to a request for comment from CBC News on Monday.
Other crypto exchanges are being held
Other major cryptocurrencies also had trouble dealing with the flood of trading orders, with Binance saying it had “temporarily stopped” bitcoin withdrawals.
The sell-off resulted in a total value of all cryptocurrencies below $ 1 trillion, a threshold below which it has not fallen since January 2021. The value of crypto assets peaked at about $ 2.9 trillion in November 2021, before countries around the world began to see inflation rise to its highest point in decades.
On Friday, data showed that inflation in the United States rose to 8.6% in May, the highest level in more than 40 years. Investors and market observers hoped the figure would fall from the 8.3% level reached the previous month, but instead became even higher, a worrying sign that the central bank’s efforts, such as raising interest rates to curb inflation does not work.
“As inflation proves to be an even more difficult opponent to win than expected, bitcoin and etherium continue to suffer serious bruises in the ring,” said Susanne Streetter, senior investment and market analyst at Hargreaves Lansdown.
“They are the main victims of the flight away from risky assets, as investors are worried about spiraling consumer prices around the world.
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