The ‘crypto winter’ may be about to get colder still after Bitcoin dropped below the symbolic $20,000 mark over the weekend.
The most valuable cryptocurrency has lost 57% of its value this year, with a whopping 37% of that in this month alone.
It is the first time BTC has dropped below $20k since December 2020, having hit an all-time high of $68,000 in November 2021.
The collapse of the Terra coin and stablecoin has propelled a downward spiral which has resulted in crypto lender Celsius Network pausing withdrawals, swaps and transfers, leading to fears it could be liquidated.
A week on from halting withdrawals, the company says it “maintains an open dialogue with regulators and officials” and “plans to continue working with them… regarding this pause and our company’s determination to find a resolution”.
The company is also halting communication with its clients via Twitter Spaces and ‘ask me anything’ (AMA) sessions “to focus on navigating these unprecedented challenges”.
Before the weekend, another crypto lender also suspended withdrawals and the redemption of crypto assets. Babel Finance is scrambling to pay its clients due to the market drop, which is currently at $879 billion overall mere months after almost topping $3 trillion.
Meanwhile users of Solana-based borrowing and lending service Solend voted on Sunday to force a takeover of the protocol’s largest account in an unprecedented governance move.
Solend said the whale’s extremely large margin position was dangerously close to a ‘catastrophic on-chain liquidation cliff’ and that a sell-off ‘could cause chaos’ in Solana’s DeFi markets.
Solend Labs will liquidate $20 million of SOL tokens via over-the-counter (OTC) trades instead of decentralised exchanges if the price of SOL drops too low in an attempt to avoid a serious knock-on effect.
Prices, however, have risen across the board in the 24 hours from Sunday morning to Monday (7am UK time).