Bitcoin and other cryptocurrencies plunged throughout the weekend and into Monday as high inflation sent investors running for the exits and caused major trading platforms to crash.
Bitcoin was changing hands below US$24,000 at one point Monday morning, down 20% since Friday and enough to drive the value of the world’s dominant cryptocurrency down to its lowest level since December 2020. .
The selloff prompted a major crypto exchange, called Celsius, to halt withdrawals late Sunday, meaning investors can’t withdraw what’s left of their money. “We are taking this step today to put Celsius in a better position to meet, over time, its withdrawal obligations,” said the exchange, which had $12 billion in assets before the race.
Quebec’s pension plan, Caisse de depot et placement du Quebec, is one of Celsius’ backers, having participated in a $400 million investment in the platform last November.
“Blockchain technology has the potential to disrupt several sectors of the traditional economy,” the Caisse said at the time. “As digital assets grow in adoption, we intend to seize the right opportunities, while working with our partners towards a regulated industry. »
The Caisse did not immediately respond to a request for comment from CBC News on Monday.
Other Crypto Exchanges Crash
Other major crypto exchanges have also had issues dealing with the deluge of trading orders, with Binance claiming to have “temporarily suspended” Bitcoin withdrawals.
The selloff brought the total value of all cryptocurrencies below US$1 trillion, a threshold it has not crossed since January 2021. The value of crypto assets peaked at around US$2.9 trillion. dollars in November 2021 before countries around the world begin to see inflation rise to its highest point in decades.
On Friday, data showed the inflation rate in the United States hit 8.6% in May, the highest level in more than 40 years. Investors and market watchers had hoped the figure would decline from the 8.3% level hit the previous month, but instead it went even higher in a troubling sign that central bank efforts, such as rate hikes to contain inflation, do not work. .
“While inflation proves to be an even tougher opponent to beat than expected, Bitcoin and Ethereum continue to have serious bruises in the ring,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. .
“They are the main victims of the flight of risky assets as investors worry about soaring consumer prices around the world. »