Crypto

Crypto Market Tumult Drops Bitcoin To 18-Month Low

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While stocks may be off to another rough start for the week, they are doing better than crypto.

Bitcoin plummeted—again—to hit its lowest mark since December 2020. As of early Monday morning, the cryptocurrency was down more than 10%—pricing it at around $23,500, well off its highs in November when it was flirting with $68,000.

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The drop comes amid more bad news in the crypto industry, as lending platform Celsius Network said over the weekend it is suspending withdrawals due to “extreme market conditions.”

According to Crunchbase, Celsius has raised more than $860 million in funding.

Celsius’ announcement was followed Monday morning by crypto exchange giant Binance saying it is temporarily pausing bitcoin withdrawals “due to a stuck transaction causing a backlog.”

Of course, this comes just weeks after the collapse of TerraUSD—also called UST. The stablecoin was pegged on a 1-to-1 basis to cryptocurrency Luna. However, the financial engineering to maintain its 1-to-1 peg to its backup assets failed and coins became worthless.

It was just in April the Luna token hit a high market cap of around $41 billion.

This is all occurring at a very interesting time for the industry, as just last week a bipartisan Senate proposal to bring some federal oversight to the industry was introduced. While the bill proposed a range of provisions, its biggest takeaway was giving domestic regulatory power to the Commodity Futures Trading Commission and not the Securities and Exchange Commission. This basically classifies crypto as a commodity and not a security.

The freezing of transactions by large lending and exchange platforms in recent days is undoubtedly being watched closely by those who drafted that proposal announced last week.

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Illustration: Dom Guzman

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