Cryptocurrency prices extended their slide ahead of the Federal Reserve’s interest rate decision on Wednesday.
Bitcoin, the largest cryptocurrency, was recently down 3.5% to $21,331, while ether tumbled 6.3% to $1,121, according to CoinDesk data. The total market capitalization of all digital currencies fell to $913 billion, well below its November peak of $3 trillion, according to CoinMarketCap data.
The crypto market was sent into a tailspin Sunday night when Celsius, one of the largest crypto lenders, told users that it is pausing all withdrawals, swaps, and transfers between accounts due to extreme market conditions. The company has hired restructuring attorneys to explore possible solutions for its mounting financial problems, the Wall Street Journal reported on Tuesday.
“A lot of traders are waiting to see if the Fed can restore confidence that they can do their part in getting inflation under control, which would ultimately give risky assets like Bitcoin a lifeline here,” said Edward Moya, a senior market analyst for trading firm Oanda.
Some crypto stocks recovered from heavy recent losses early Wednesday. Coinbase, one of the largest crypto exchanges in the U.S., rose 5.6%. The company, whose stock has plunged 84% since its initial public offering last year, announced that it is cutting about 18% of its staff. Software intelligence firm MicroStrategy rose 8% after tumbling as much as 25% on Tuesday. MicroStrategy held 129,218 bitcoins, worth $5.9 billion, at the end of March, it said.
Crypto mining stocks are seeing little relief, with Riot Blockchain and Marathon Digital Holdings declining by 1.7% and 0.9% in Wednesday trading.
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