Bitcoin dipped below $24,000 for the first time since 2020 as Binance, the world’s biggest cryptocurrency exchange stopped users from withdrawing bitcoin early Monday.
Binance founder and CEO Changpeng Zhao blamed the “temporary pause” on “a stuck transaction causing a backlog” in a tweet at 8 a.m. on Monday.
Zhao initially said the clog would take 30 minutes to clear, then wrote in a follow-up tweet that it was “going to take a bit longer to fix than my initial estimate.”
The freeze came as cryptocurrency investors scrambled to cut their losses during an increasingly brutal rout. Bitcoin, the largest cryptocurrency, fell more than 13% early Monday.
The second-largest cryptocurrency, ethereum, was down 13.8% at around $1,230.
The stock market was also battered in pre-market trading, with the tech-heavy Nasdaq Composite Index slumping 2.8% and the Dow Jones Industrial Average down 1.7%.
The selloff is an indication that investors are shedding risky assets in favor of safer options like the dollar as the US continues to be slammed by record levels of inflation — forcing the Fed to hike interest rates which could potentially push the economy into a recession.
Since peaking at $68,991.85 in November, bitcoin’s value has plummeted some 65%.
The total value of crypto assets hit a peak of $2.8 trillion last November. It fell below $1 trillion on Monday for the first time since 2020, according to CoinMarketCap.
Investors on Monday sought safety with the US central bank seen likely to aggressively ramp up borrowing costs further to combat runaway inflation.
The phrases #cryptocrash, bitcoin and #stockmarketcrash were all trending on Twitter Monday morning.
Crypto took another hit over the weekend after Celsius Network, a leading digital coin lender, put a pause on withdrawals, citing volatile conditions in the market.
“Today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said in a statement late Sunday.
Celsius made the move “due to extreme market conditions”, it added.
The total value of Celsius’s customer deposits had already shrunk by more than half to under $12 billion in May compared with the end of last year.
Last month, TerraUSD, a so-called stablecoin that was pegged to the US dollar, collapsed, wiping out $40 billion in investor funds.
Stablecoins are supposed to be less vulnerable to big swings — thus the name — but Terra suffered a spectacular collapse in a matter of days.