Sign up now for FREE unlimited access to Reuters.com Register HONG KONG, June 20 (Reuters) – The cryptocurrency industry was on the rise Monday morning as investors feared that the spread of problems to major cryptocurrencies could unleash a major upheaval if not curtailed. Bitcoin, which has lost 57% so far this year and 37% this month, fell below $ 20,000 at the weekend for the first time since December 2020. The level is symbolic, as it was around the peak of the 2017 cycle. The fall in price follows difficulties in several important players in the industry, while further reductions could have an impact as other cryptocurrency investors are forced to sell their holdings to meet margin requirements and cover losses. Sign up now for FREE unlimited access to Reuters.com Register Crypto hedge fund Three Arrows Capital is exploring its options, including selling assets and bailing out another company, its founders told the Wall Street Journal in a story published Friday, the same day that cryptocurrency lender Babel Finance focus on Asia has said it will suspend. withdrawals. read more US-based lender Celsius Network said earlier this month it would suspend withdrawals and many of the industry’s recent problems could be traced back to the spectacular collapse of so-called stablecoin TerraUSD in May. read more Bitcoin traded at $ 20,000 on Monday, while the No.2 token ether was at $ 1,075, having fallen below its symbolic level of $ 1,000 over the weekend. “If the market goes higher, everyone is relieved, things will be refinanced, people will raise equity and all the risk will dissipate. But if we move much lower than here, I think it could be a complete storm,” he said. Adam Farthing, Head of Risk Office for Japan at B2C2 Encryption Provider. “There is a lot of credit being withdrawn from the system and if lenders have to absorb losses from Celsius and Three Arrows, they will reduce the size of their future loan books, which means that the entire amount of credit available in the cryptographic ecosystem is very reduced. “It looks a lot like 2008 to me in terms of how a domino of bankruptcies and liquidations could be,” Farthing said. Certainly, developments in encryption coincided with a slide in stocks, as US stocks suffered their biggest weekly percentage drop in two years amid fears of rising interest rates and a growing chance of a recession. The price of bitcoin tends to move in much the same way as other risky assets, such as technology stocks. Smaller cryptocurrencies have been hit even harder by large tokens as investors sought the comparative security of bitcoin and stablecoin whose values are linked to those of traditional assets, most commonly the US dollar. The total cryptocurrency market capitalization is about $ 870 billion, according to the Coinmarketcap pricing site, up from a $ 2.9 trillion high in November 2021. Read more However, even the market capitalization of stablecoins has declined in recent months, suggesting that investors are raising money from the industry as a whole. read more Tether, the world’s largest stablecoin, saw its market value fall to about $ 68 billion on Monday, from more than $ 83 billion in early May. Sign up now for FREE unlimited access to Reuters.com Register Report by Alun John Montage by Shri Navaratnam Our role models: The Thomson Reuters Trust Principles.
