First Mover Americas: Bitcoin, Ether Plunge Anew as Celsius Halts Withdrawals

Good morning, and welcome to First Mover. I’m Bradley Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off.)

• Price point: Bitcoin tumbles to $23,000 as fears mount of fresh systemic risks, with financial markets still under threat from the Federal Reserve's campaign to stamp out inflation.
• Market moves: The crypto lender Celsius jolted traders with the news that it was pausing withdrawals due to "extreme market conditions."

Price point

Bitcoin (BTC) suffered one of its worst price declines of the year, tumbling alongside ether (ETH) and other cryptocurrencies as a fresh wave of panic struck traders just one month after the Terra blockchain's meltdown.

As of press time, bitcoin was down 11% to about $23,900, extending a losing streak that has now stretched to seven straight days.

Ether, the native token of the Ethereum blockchain, plunged 16% to $1,232. The overall market capitalization of cryptocurrencies fell below $1 trillion for the first time since January 2021.

The latest sell-off came as fears emerged of a new potential systemic threat to digital-asset markets, after the crypto lending service Celsius announced in a blog post that it was pausing withdrawals amid "extreme market conditions."

The price of Celsius' CEL token fell over 50% after the news came out.

Analysts also cited growing concern that the Federal Reserve may have to step up its campaign to tighten monetary conditions after a report Friday showed the U.S. inflation rate unexpectedly accelerating to a new four-decade high. Cryptocurrencies, like stocks, have come under harsh downward price pressure this year from the central bank's push to withdraw excess liquidity from financial markets.

In traditional finance, U.S. stock futures were down, pointing to a dismal start to the week as signals appeared in the bond market that recession risk is rising.

Read More: Bitcoin Plunges Below $25K, Lowest Level Since December 2020

Market moves

Nexo Proposes Celsius Buyout as Rival Lending Platform Halts Withdrawals - by Oliver Knight and Nikhilesh De

Cryptocurrency lending platform Nexo expressed interest in buying certain assets from rival Celsius after Celsius said it was freezing withdrawals and transfers because of extreme market conditions.

In a letter to Celsius on Monday, Nexo said it was particularly interested in Celsius’ collateralized loan portfolio. Nexo publicized the letter, which didn't mention a price, in a tweet. The letter was from a business entity named Nexo AG in Zug, Switzerland, though Nexo's operations are based out of Sofia, Bulgaria, according to executives at the firm.

Nexo said it was looking to acquire assets “mostly or fully of collateralized loan receivables secured by corresponding collateral assets, as well as brand assets and the customer database."

Celsius wrote earlier in a blog post that "We are working with a singular focus: to protect and preserve assets to meet our obligations to customers.”

“Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible," Celsius wrote. "There is a lot of work ahead as we consider various options. This process will take time, and there may be delays."

Link to full story: Nexo Proposes Celsius Buyout as Rival Halts Withdrawals

Latest headlines

• Solana, Dogecoin Lead Plunge in Majors as Traders Warn of ‘Severe Losses’ Ahead. Higher inflation will continue forcing higher interest rates, in a potential negative for economic growth, one analyst said.
• Silvergate Capital Could Benefit From Institutional Crypto Adoption, Wells Fargo Says. The Wall Street bank initiated coverage of the stock with an "overweight" rating and a $120 price target.
• Michael Saylor's Microstrategy Leads Plunge in Crypto-Related Stocks. Bitcoin has tumbled below $24,000 for the first time in 18 months, and ether dropped to a 15-month low.
• Goldman Sachs Executes Its First Trade of Ether-Linked Derivative: Report. London-based Marex Financial was the counterparty for the trade.
• Crypto Market Cap Falls Below $1T for First Time Since Early 2021. Bitcoin lost some 13% of its value in the past 24 hours.
• Binance.US Accused of Misleading Investors in Class Action Lawsuit Over Terra. A class action lawsuit against Binance.US has been filed on behalf of investors in connection to the collapse of terraUSD (UST).
• Nexo Proposes Celsius Buyout as Rival Halts Withdrawals. Celsius said it also paused its swap and transfer products and did not provide a timeline for resuming withdrawals.
• Bitcoin Plunges Below $25K, Lowest Level Since December 2020. A weak macroeconomic environment and systemic risk from within the crypto space have caused nearly 12 successive weeks of losses for the asset.
• Crypto Lending Service Celsius Pauses Withdrawals, Citing 'Extreme Market Conditions.' The company will also pause its swap and transfer products, according to a blog post. It did not provide a timeline for resuming withdrawals.
• How Much ETH Does Joe Lubin Hold? As Ethereum gears up for the switch to proof-of-stake, how the network’s tokens have been distributed comes back into focus.

Today’s newsletter was edited by Bradley Keoun and produced by Parikshit Mishra.