Cryptocurrency market continues to witness significant fall in valuation for several days in a row. Bitcoin, one of the major cryptocurrencies, has dived to below $24,000 from all-time high of over $68,000 in November, 2021, i.e. within a span of 7 months. Another crypto leader Ethereum has also tanked almost to $1227.
Crypto market situation has come to such an alarming pass that Celsius, a cryptocurrencies lending company paused withdrawals from its accounts. According to memo issued by Celsius to its community of customers, “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”
At one time today, crypto markets were spooked when even the largest Cryptocurrency exchange, Binance also paused withdrawal of funds for its customers, though temporarily and resumed sometime after.
The tumbling of crypto market is mainly triggered by growing fears among the investors about rise in interest rates in USA. Latest inflation rate is also highest in last 30 years in USA. Moreover, concerns are being repetitively expressed about recession knocking on the doors of USA and in fact, all over the world. Some crypto companies have also announced job layoffs due to crippling conditions in the crypto markets.
Pausing of withdrawals by Celsius added further panic among the crypto investors today that saw a crash in the market. Ironically , Celsius, just 5 days earlier had issued a sort of reassurance to its customers saying, “Celsius continues to process withdrawals without delay. We have not had any issues meeting withdrawal requests. Celsius honors all withdrawals as quickly as possible and works hard to support customers if and when there are delays.”
It may be noted that Celsius is not facing withdrawal problems only. It is being linked with colossal collapse of Terra USD’s Luna Stablecoin as well.
Celsius, in its memo says that its objective is “stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible.” However, Celsius has not given a definite timeline as to when the withdrawal facility will be restored.
The constant meltdown in crypto market lays bare another claim of the crypto proponents that crypto markets provide a better option ala hedge against decline in stock markets.
Governments of various nations like USA, India, China are taking measures to discourage people from investing in crypto assets or digital currencies. Talks of framing regulations are growing louder. But in the absence of laws and regulations, authorities are feeling handicapped in taking action to protect people from falling victims of crypto scams and financial losses.
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