Cryptocurrencies: advantages and disadvantages of this payment system 4:20
London (CNN Business) --
Bitcoin and other cryptocurrencies are plummeting on Monday, and two of the world's largest cryptocurrency platforms have curtailed their activity as the market meltdown continues apace.
The Celsius network, which has 1.7 million customers, said "extreme market conditions" had forced it to temporarily stop all withdrawals, cryptocurrency exchanges and transfers between accounts.
"We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while taking steps to preserve and protect assets," the company said in a blog post.
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The UK-registered company has about $3.7 billion in assets, according to its website.
It pays interest on cryptocurrency deposits and lends them for a return.
Binance, the world's largest cryptocurrency exchange, said it had temporarily suspended withdrawals on its bitcoin network, though it clarified the cryptocurrency could still be withdrawn on its other networks.
The company said it made the decision because some transactions had "got stuck" and were causing a delay.
"Binance will reopen withdrawals on the bitcoin network once our withdrawal system stabilizes, and we will notify users in a further announcement," the company said in a statement.
The cryptocurrency market has taken a hit in recent months after its pandemic boom turned bust.
As the world's major central banks have raised interest rates to stem the spiraling inflation, traders have been quick to shed riskier investments, including their volatile crypto assets.
Bitcoin, the world's most valuable cryptocurrency, has lost 15% in the last 24 hours, putting it 66% below its all-time high in November last year, when it was trading around $69,000, according to Coinbase data.
Bitcoin dipped below $24,000 on Monday, sending the crypto to its lowest level since December 2020.
Ether, the second most valuable digital currency, plunged 17%, and has now lost around 75% of its value since November.
So-called "stablecoins" — cryptocurrencies that are pegged to the value of more traditional assets — have also taken a hit.
Tether, a popular stablecoin, broke its peg to the US dollar in May, debunking the idea that it could serve as a hedge against volatility.
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TerraUSD, a riskier algorithmic stablecoin that used complex code to peg its value to the US dollar, crashed the same month, wiping out the savings of thousands of investors.
The coin was valued at just over $18 billion in early May before its crash, according to data from CoinMarketCap.
Celsius Network did not say when it will allow customers to withdraw their deposits again, only that "it will take time."
Meanwhile, governments are closely watching the fallout from the cryptocurrency crash and could take steps to protect investors.
“There are a lot of risks associated with cryptocurrencies,” US Treasury Secretary Janet Yellen told the Senate last month.
She said that her department was going to publish a report on the matter.
Julia Horowitz contributed her report.
