Crypto crash live: Bitcoin back up above key milestone, but crypto market below $900B

stETH has dropped to $4 billion from about $10 billion last month as holders sell while ether’s price crashes.

“In the short term, stETH will face tremendous selling pressure,” Huobi Research Institute’s report states. “Turbulence is expected in the near future.”

Celsius, which froze withdrawals last weekend is also holding 409,260 stETH tokens.

Celsius took a loss of almost $71 million earlier from staking stETH on Stakehound because Stakehound misplaced the keys, according to Johnny Louey and Andy Hoo, analysts at Huobi Research Institute.

“What Celsius can do is sell its stETH in order to buy ETH on the market to satisfy client requests,” Noelle Acheson, head of market insights at crypto market maker Genesis, told CoinDesk

Billionaire Bill Gates has once again spoken out about cryptocurrencies and non-fungible tokens, claiming they are “100 per cent based on greater fool theory - that somebody is going to pay more for it than I do”.

Speaking at TechCrunch talk, he joked: “Obviously digital images of monkeys are going to improve the world immensely, and that’s so incredible.”

As the biggest private owner of famland in the US, he added: “I’m used to asset classes like a farm where they have output or a company where they make products.”

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A further 10 per cent price slide on Wednesday morning has left bitcoin hovering just above $20,000.

Rewind nearly five years and this was the peak seen in 2017 after a record-breaking rally. If it fails to hold support at this key level, analysts fear that even more losses could be on the way. BTC is currently around 70 per cent down from its 2021 record, with major corrections in the past wiping upwards of 80 per cent from the cryptocurrency’s value.

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Crypto lenders and exchanges need to leverage adult tools to safeguard against a liquidity crisis, according to Dr. Anna Becker, co-founder of AI trading platform EndoTech.

“In the same way trading platforms are growing up by incorporating volatility into their business strategy, for instance with the use of algorithmic trading as opposed to the old model of emotional buy and hold trading, crypto lenders and exchanges need to leverage adult tools to safeguard against a liquidity crisis like the one we’re seeing,” said Dr. Becker.

“It is unacceptable for lending institutions and currency exchanges to prevent customers from accessing their funds. I urge regulatory bodies to clamp down on cowboy crypto firms who are robbing innocent people, and help steer the market into maturity.”

A tweet from crypto hedge fund Three Arrows Capital has caused more fear in the market. The hedge fund has been liquidating its crypto holdings admit the price drop.

“We are in the process of communicating with relevant parties and fully committed to working this out,” former Credit Suisse Group AG trader Zhu Su tweeted from his verified account, without providing further details.

Three Arrows started withdrawing a cryptocurrency called staked Ether, or stETH from decentralized platforms last month, Bloomberg reports.

Today, BItcoin is down 6.13 per cent to $21.072. Ethereum is down 8.52 per cent to $1,114.08.

US software developer MicroStrategy says it has not received a margin call against its bitcoin-backed loan, and could withstand more volatility in the crypto market.

“We can always contribute additional bitcoins to maintain the required loan-to-value ratio,” MicroStrategy said in a statement, according to Reuters.

“Even at current prices, we continue to maintain more than sufficient additional unpledged bitcoins to meet our requirements under the loan agreement,” the company reportedly said.

Arthur Hayes, former BitMEX chief, has said if bitcoin’s value dips below the $20,000 mark, a “massive sell pressure” may ensue, which could further drive down prices of the leading cryptocurrency.

Ethereum’s price could also be impacted in a similar way if it slips below $1000, he said.

“If these levels break, $20k $BTC & $1k $ETH, we can expect massive sell pressure in the spot markets as dealers hedge themselves,” Mr Hayes said.

“We can also expect that there will be some otc dealers and that will be unable to hedge properly and might go belly up,” he added.