Bitcoin’s Price Falls Below $20,000

On Jun 18, 2022

The price of bitcoin has fallen below the key psychological level of $20,000 as a brutal selloff in cryptocurrencies deepened.

Bitcoin fell momentarily to $18,739.50 and stayed below $20,000 on Saturday, according to CoinDesk, losing 72% of its value from its high in November. Concerns about the Federal Reserve’s actions to tame higher-than-expected inflation have pushed both stocks and cryptocurrencies into a bear market. Big names in the industry, including

Coinbase Global Inc.,

the biggest cryptocurrency exchange in the U.S., have recently announced job cuts.

“It will be a lot of pain for a lot of investors,” said Yuya Hasegawa, a market analyst at Japanese crypto exchange Bitbank Inc. People will lose confidence in the crypto market as a whole, but seasoned crypto investors and those who believe in its long-term prospects will see an opportunity to buy at discounted prices, he said.

Ether, another major cryptocurrency, fell below $1,000, briefly reaching $975.35 on Saturday, according to CoinDesk, its lowest level since January 2021.

Bitcoin’s slide from its record high of $67,802 in November has contributed to a roughly $2 trillion wipeout in the broader market. Crypto’s total market capitalization, which peaked in November at nearly $3 trillion, stood at around $840 billion Saturday—its lowest since January 2021, according to data provider CoinMarketCap.

Bitcoin traded around the $30,000 mark for most of May before dropping sharply again in June after a fresh inflation shock and worries about rising U.S. interest rates. Investors have been unloading assets seen as risky, such as cryptocurrencies and technology stocks.

Individual investors have received margin calls, with about $260 million of collateral pledged by about 80,000 retail traders liquidated over the past 24 hours, according to data provider CoinGlass. That compares with $1 billion earlier this week.

A growing number of previously highflying crypto firms have been feeling the pain in what has been dubbed a “crypto winter.” Cryptocurrency lender Babel Finance told customers Friday that it was suspending redemptions and withdrawals from all products, citing “unusual liquidity pressures.” One of the largest crypto lenders, Celsius Network LLC, hasn’t let users withdraw funds for roughly a week, citing extreme market conditions.

Cryptocurrency-focused hedge fund Three Arrows Capital Ltd. has hired legal and financial advisers to help work out a solution for its investors and lenders after suffering heavy losses from a broad market selloff in digital assets, the firm’s founders told The Wall Street Journal.

The surge in cryptocurrency valuations over the last two years was aided by big-name investments from companies such…