On Sunday night, the Celsius Network, one of the largest crypto lending platforms, abruptly announced a “pause” on withdrawals and transfers, citing “extreme market conditions.” Celsius announced its halt as markets in Asia opened on Monday morning, and the price of its CEL token — worth nearly $7 a year ago — lost a third of its remaining value, falling to just 21 cents.
In the hours that followed the pause, prices of other cryptocurrencies have also tumbled. CoinMarketCap’s global cryptocurrency tracker showed the total market cap of crypto assets (including stablecoins and tokens) below $1 trillion as of 8:53AM ET, falling from its peak of $3 trillion last November.
The price of Bitcoin has fallen nearly 12 percent in the last 24 hours, shedding about $2,000 from its price since the Celsius news came out, dropping to $23,510.15 as of 9:33AM ET, according to Coinbase. The last time the price of Bitcoin was that low was in December 2020, while it peaked on November 9th, 2021, at $69,000. Today’s drop is continuing a slide that CoinDesk noted has gone on for 12 straight weeks, from $49,000 in March.
The same goes for Ethereum, which is down about 14 percent in the last day and dropped from $1,355 prior to the Celsius announcement to about $1,238 as of 9:33AM ET. On November 9th last year, it also peaked, reaching $4,891.
A key area to watch is Bitcoin mining, where CoinTelegraph reports, based on data from Bitdeer and others, that older mining rigs risk shutdown at current prices and mining difficulty. That’s the point where they would no longer be profitable to operate — with profits canceled out by the cost of the electricity it takes to power the rigs.
According to the report, newer generation hardware can continue to return a profit even if prices keep falling, but a unit like Antminer’s S17+ (73T) rig could become unprofitable if the price falls below $22,000. This also aligns with research showing that if the price remains below $25,200, it could shrink the Bitcoin network’s global energy use significantly, to below 120 TWh annually.
This is only impacting the Bitcoin network. You can still withdraw Bitcoin on other networks like BEP-20.— CZ Binance (@cz_binance) June 13, 2022
Likely this is going to take a bit longer to fix than my initial estimate. More updates soon. Thanks for your patience and understanding
In the midst of these falling crypto prices, the major trading exchange Binance also paused Bitcoin withdrawals. Binance CEO Changpeng Zhao announced the freeze at 8AM ET, saying it was “due to a stuck transaction causing a backlog.” Originally, he said the pause would be resolved in about 30 minutes but followed that up later saying, “Likely this is going to take a bit longer to fix than my initial estimate.”
At around 11:30AM ET, Binance announced Bitcoin network withdrawals have resumed. According to the support page, “We are still working to process the pending Bitcoin (BTC) network withdrawals, and this is estimated to be completed in the next couple of hours. Please note that pending Bitcoin (BTC) network withdrawals will be rejected. In this case, the relevant users will need to resubmit their withdrawal requests.”
The price for shares of the crypto trading platform Coinbase, which already announced a hiring freeze and rescinded accepted job offers, dropped by 20 percent before markets opened on Monday morning, according to CNBC. Prices of its shares are down 76 percent over the last year.
Update June 13th, 12:33PM ET: Updated status of Binance Bitcoin withdrawals.
Update June 13th, 1:57PM ET: Added information and link about the potential environmental impact of lower Bitcoin prices.