Bitcoin, the cryptocurrency, rebounded after crashing last weekend, and once crossed the $21,000 level per coin. However, it is down 69% from the high in November last year.
The Wall Street Journal (WSJ) noted that Bitcoin and other cryptocurrencies rebounded on the 21st (local time) based on CoinDesk data.
According to CoinDesk, Bitcoin fell to $17,601.58 per coin on the afternoon of the 18th, the lowest since November 2020.
As of the 21st, Bitcoin once climbed to $21,689.30. As of 8:56 am on the 22nd (Korean time), it is trading at $2715.60, up 0.70% from 24 hours ago.
Ethereum, the second-largest market share, fell to $880.93 on the 18th. Since then, it has risen 4.7% to $1168.42. Currently, it is trading at $1,123, down 0.44% from 24 hours ago.
According to CoinMarketCap data, the market value of all digital assets on that day was $939 billion, down from $3 trillion in November last year.
This is because investors are withdrawing from speculative assets such as cryptocurrencies as the Federal Reserve continues to raise interest rates to tame higher-than-expected inflation.
Large cryptocurrency companies such as Coinbase Global, BlockFi, and Crypto.com responded in part, announcing layoffs of hundreds of people.
“We are driven by the macro environment, and cryptocurrencies are definitely not immune to it,” said Kevin Kang, chief investment officer (CFO) of cryptocurrency hedge fund BK Coin Capital. “I think we will continue to see bear markets for the foreseeable future until the Fed stops raising rates and ultimately begins easing,” he said.
Cryptocurrency companies are under great pressure to the extent that the so-called ‘cryptocurrency winter’ has arisen in the recent downturn in the overall market.
Celsius Network, one of the largest cryptocurrency lending platforms, has prevented users from withdrawing funds for over a week due to ‘extreme market conditions’.
Asia-based cryptocurrency lender Babel Finance told clients on the 17th that it is suspending repayments and withdrawals on all products due to unusual liquidity pressures.
The company did not resume repayment although it had reached an agreement in advance with its clients and major customers on the repayment period of some debts on the 20th.
Cryptocurrency-focused hedge fund Three Arrows Capital is similar.
They hired legal and financial advisors after suffering heavy losses from a sell-off in the digital asset market.
BlockFi, another large cryptocurrency lender, said it has secured a $250 million revolving credit facility from cryptocurrency exchange FTX to boost its balance sheet.
Armando Aguilar, a venture capitalist at Lightshift Capital, said: “Prices have recovered from the weekend downturn, but the concerns of industry giants have not gone away.