Crypto meltdown: Bitcoin hovers around $20,000 as major players struggle
The cryptocurrency industry was on edge on Monday morning as investors feared that contagion from problems at major crypto players could unleash a major shakeout if not contained.
Bitcoin, which has lost 57 per cent so far this year and 37 per cent this month, fell below $20,000 (€19.01) over the weekend for the first time since December 2020.
The level is of symbolic significance, as it was roughly the peak of the 2017 cycle.
The price fall follows difficulties at several major industry players, while further declines could have a knock-on effect as other crypto investors are forced to sell their holdings to meet margin calls and cover losses.
Crypto hedge fund Three Arrows Capital is exploring its options, including the sale of assets and a bailout by another firm, its founders told the Wall Street Journal in a story published Friday, the same day Asia-focussed crypto lender Babel Finance said it would suspend withdrawals.
US-based lender Celsius Network earlier this month said it would suspend withdrawals, and many of the industry's recent problems can be traced back to the spectacular collapse of the so-called stablecoin TerraUSD in May.
Bitcoin was trading on either side of $20,000 on Monday, while no.2 token Ether was at $1,075 (€1,022), having dipped below its own symbolic level of $1,000 (€950.78) over the weekend.
"If the market goes higher, everyone breathes a sigh of relief, things will get refinanced, people will raise equity, and all of the risk will dissipate. But if we move much lower from here, I think it could be a total shitstorm," said Adam Farthing, chief risk officer for Japan at crypto liquidity provider B2C2.
"There is a lot of credit being withdrawn from the system and if lenders have to absorb losses
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