On Monday, bitcoin fell 15% to $ 23,250.72, according to market data Dow Jones. This is down 20% from Friday and 66% from the November high of $ 67,802.30. The fall of Bitcoin since November has helped eliminate about $ 2 trillion in the wider market. Crypto’s total market capitalization, which peaked at nearly $ 3 trillion in November, was about $ 975 billion on Monday night, according to data provider CoinMarketCap. There are some clear reasons why bitcoin is selling out now. First, its moves were generally more in line with other risky assets, such as technology stocks, as professional traders have joined the cryptocurrency market in larger numbers. Speculative assets such as cryptocurrencies are declining as inflation and central banks try to combat them through higher interest rates, a dynamic that makes risk-less stocks less attractive than safer assets. On Friday, the US inflation index reached 8.6%, dragging the stock market down. As the turmoil in the cryptocurrency market fluctuated over the weekend, a widely used cryptocurrency froze customer withdrawals. Celsius Network LLC said it was suspending all withdrawals, exchanges between cryptocurrencies and transfers between accounts “due to extreme market conditions”. As of May, the lender had managed $ 11 billion in user assets, according to its website. Later, a major cryptocurrency exchange, Binance, stopped bitcoin withdrawals. The company said at 8 p.m. ET that it was a technical issue and he expected it to start again in 30 minutes. Withdrawals resumed shortly before noon New York time. Companies in the industry are increasingly resorting to layoffs in the middle of the sale. A Celsius competitor named BlockFi said Monday it would cut 20% of its staff of about 850 employees, according to CEO Zac Prince. “Like many others in technology, we have been affected by the dramatic change in macroeconomic conditions, which has had a negative impact on our growth rate,” Prince wrote on Twitter. On Friday, Crypto.com announced it would cut 260 employees, about 5% of its staff. In addition to bitcoin and cryptocurrencies, shares traded in the cryptocurrency sector were also penalized. MicroStrategy Inc. MSTR -25.18% fell 25% to $ 152.15. Coinbase Global Inc. COIN -11.41% fell 11% to $ 52.01. Riot Blockchain Inc. RIOT -10.06% fell 10% to $ 4.65. MicroStrategy, a Virginia-based business software company, has pledged its assets to bitcoin, a strategy led by the company’s founder and CEO, Michael Saylor. The company has converted all its cash reserves into bitcoin, has issued debts to buy more bitcoin and has borrowed funds to buy even more bitcoin.

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A pre-purchase primer full of news, trends and ideas. In addition, updated market data. It had 129,000 bitcoins on its balance sheet at the end of the first quarter, the company said. Almost 96,000 of them were not pledged as collateral. The rest, however, could be subject to margin calls depending on how deep the selloff goes. The company has not yet received such calls, Mr. Sailor said. “We do not expect to receive a margin call and the company has a lot of additional collateral if we need to publish more,” he said in an email. However, individual investors accept margin calls. About $ 1 billion in collateral pledged by some 260,000 retailers has been liquidated in the past 24 hours, according to data provider CoinGlass. The renaissance in daily trading during the pandemic and the hunt for assets that could yield yields while bond yields fell to historic lows led bitcoin to take off in the fall of 2020. The cryptocurrency soared to record highs in November last year. Since then, it has fallen 65% against the dollar, refuting proponents’ predictions that the cryptocurrency could replace gold as a hedge against both inflation and turmoil in wider markets. “Risky and highly liquid cryptocurrencies are usually the first to be sold in a marketplace,” said Jeff Mei, chief marketing officer at blockchain technology company ChainUp. Incidents such as the cessation of Celsius withdrawals and the previous collapse of stablecoin terra USD tend to cause fear and a lack of confidence in the market, said Leah Wald, co-founder and CEO of Valkyrie Investments. It reverses the kind of unbridled enthusiasm that traders had for encryption, a dynamic nickname nicknamed “hopio” that has driven cryptocurrencies since 2020. “Sales are created when there is a lot of ‘hops’ and last year there was a lot of ‘hops’ and euphoria for projects that did not have much of a base behind them,” he said. None of this should come as a surprise, he said. Crypto is following in the footsteps of other mania-based assets, such as tech stocks in the dot-com era or silver in the Hunt brothers era. “All assets at the end of the day follow the same trend,” he said. “As much as we think encryption is a new asset class, it is not.” Write to Elaine Yu at [email protected], Joe Wallace at [email protected] and Paul Vigna at [email protected] Corrections & Enhancements Bitcoin sell-off is the fourth deepest in the 13-year history of cryptocurrency. An earlier version of this article incorrectly stated that it was the third largest bitcoin sale. (Corrected on June 13) Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8