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RIYADH: Bitcoin, the leading cryptocurrency internationally, traded lower on Monday, falling by 5.60 percent to $25,767.27 as of 8:30 a.m. Riyadh time.
Ethereum, the second most traded cryptocurrency, was priced at $1,356.23 plunging down by 5.45 percent, according to data from Coindesk.
Crypto firm Celsius halts all transfers as the market plummets
In another indication of the pressure on the crypto industry, cryptocurrency lending firm Celsius Network said on Monday it will halt withdrawals and transfers between accounts due to “extreme market conditions,” Reuters reported.
After Celsius’s announcement, Bitcoin dropped by more than 6 percent to a low of $24,888 — an 18-month low. Ethereum, the world’s second-largest cryptocurrency, plunged to $1,303, its lowest level since March 2021.
“We are taking this necessary action...in order to stabilize liquidity and operations while we take steps to preserve and protect assets,” the company said in a statement.
Recent months have seen crypto markets under pressure, as interest rates have risen around the globe, leading to a drop in crypto assets.
As a result of and in part due to the collapse of some crypto projects, there have also been price drops. Last month, the stablecoin TerraUSD collapsed in value after it broke its dollar peg.
Decentralized finance market shaken by Luna crash
As the SR150 billion ($40 billion) collapse of cryptocurrency Luna sends shockwaves through a key segment of the digital asset market, traders are shifting away from investments linked to decentralized finance, the Financial Times reported.
With so-called ‘DeFi’, projects are able to operate without centralized intermediaries such as banks by using automated systems that distribute control to key stakeholders. It is considered by many crypto enthusiasts to be one of the most promising developments in the digital asset sector.
However, Luna’s failure last month, and its linked stablecoin terraUSD, underscores the risks of investing in DeFi projects and the potential of catastrophic errors in their design, said the FT.
DeFi markets rely on stablecoins for transactions, and Terra’s disappearance hit confidence in the sector particularly hard, it added.