Today’s value, why crypto is crashing and what experts predict for the future

Bitcoin fell almost below $20,000 on Wednesday as the cryptocurrency market continues to struggle in the wake of lending website Celsius freezing all withdrawals and transfers on its platform.

The world’s largest cryptocurrency has climbed back to around $21,200, but is still down 5 percent over the past 24 hours.

Bitcoin has now lost a third of its value in the past week, and is worth less than a third of the record high reached in November.

Here’s what you need to know about the crash, and what experts predict could happen next.

Why Did Bitcoin Crash?

Bitcoin’s latest crash is heavily linked to Celsius freezing withdrawals and transfers.

Celsius is a platform that allows people who hold cryptocurrency assets to lend their tokens in exchange for high rates of fixed financial returns on their deposits. It currently has around $8 billion (£7 billion) on loan to its customers.

The platform said on Monday that it would “pause all withdrawals, exchanges and transfers between accounts” so that it can be in a “better position to meet its withdrawal obligations over time”.

It said it was making the move to “benefit our entire community to stabilize liquidity and operations while taking steps to preserve and protect assets”.

However, the decision raised concerns about Celsius’ liquidity, and investors have fled the platform in recent weeks. The value of Celsius’ assets has more than halved since October, when it handled $26 billion in client funds.

This comes after the collapse of Terra’s Luna token last month, which also had a significant effect on the crypto industry.

Transaction freezes have also accelerated an ongoing selloff in cryptocurrencies.

The general mood around crypto has cooled this year. Investors seem to be moving away from cryptocurrency and towards less risky investments in the face of global inflation.

Will Bitcoin Recover?

Edward Moya, senior market analyst at foreign exchange broker Oanda, said: “Sentiment for cryptos is terrible. Bitcoin is trying to form a base, but if price action drops below the $20,000 level, it could get even uglier.

Rich Blake, a financial consultant at Uphold, told The Independent Bitcoin could be approaching a crash.

“Crypto tumbles into the week, somewhat reliant on the vagaries of the stock markets, clearly on pins and needles over May inflation numbers – the US Consumer Price Index (CPI) report fell on Friday. His bottom line; not what anyone wanted to hear,” he said.

“Economists expected the CPI to rise by 8.3 percent year-on-year, but the headline inflation level actually came in at 8.6 percent. Wall Street was looking for a sign that inflation may have peaked.

“Minutes before Friday’s CPI report, Bitcoin struggled to stay above $30,000. Hours earlier, it was below $29,000 and appeared to be on the verge of a crash. A looming danger of a ‘crypto winter’ now hangs in the balance.”

The CoinDCX research team told Business Today: “Going into 2023, we expect major central banks to continue their trajectory of quantitative tightening and policy rate hikes – effectively limiting any significant upside unless we see more convincing trends in economic recovery. “

However, other experts remain positive about the future of crypto.

Danial, founder of Invest Diva and author of Cryptocurrency Investing For Dummies, said: “What I expect from Bitcoin is volatility in the short term and growth in the long term.”

Big four accounting firm PWC published its fourth annual global crypto hedge fund report last week.

The results showed that “while the overall crypto market was quite bearish, executives remained extremely bullish on BTC”, with 42 percent predicting that Bitcoin would be between $75-100,000 (£62,000-£83,000) by the end of 2022 be, and a further 35 per cent predict a price of more than $50,000 (£41,000).

How risky is cryptocurrency?

People invest at their own risk and cryptocurrencies are not regulated by UK financial authorities.

All crypto investments are risky, but meme coins like Shiba Inu are particularly volatile, and you should be prepared to lose everything you invest.

The Financial Conduct Authority (FCA) warned in January: “Investing in cryptoassets, or investments and loans linked to them, generally involves taking very high risks with investors’ money.

“If consumers invest in these types of products, they should be prepared to lose all their money.”

Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown previously described the risks to i.

She said: “In addition to being extremely volatile, most cryptocurrencies are unregulated, which not only adds another layer of uncertainty, but also means investors have little or no protection against fraud.”