The crypto industry has just had one of its worst days ever

Crypto has had a brutal first half of 2022, but few days have been so bad for the industry that has built up around digital currencies.

On Monday, trading platforms halted withdrawals, companies cut jobs and panicked investors dumped their holdings, dragging the market value of crypto below $ 1 trillion, down from $ 3 trillion in November.

Bitcoin plunged to a low of 18 months, falling below $ 23,000. The most valuable cryptocurrency fell by 15% in the last 24 hours, while ethereum, which is second only to bitcoin, fell 17%.

The sale comes as investors rotate out of the most risky assets due to macroeconomic headwinds and rising interest rates. But it’s worse than that. The action on Monday showed a fundamental distrust of cryptocurrencies and the platforms that support them. What was already a deep downturn began to look like a panic sale.

Here are some of Monday’s crypto lowlights:

For several weeks, concern has grown that Celsius, one of the more popular crypto-investment and lending platforms, is in the middle of a liquidity crisis. Celsius offers users a return on up to 18.63% on their deposits. It is like a product a bank would offer, except with none of the regulatory safeguards.

Celsius’ cell token fell from over $ 7 to around 33 cents over the past year – and it has fallen more than 50% in the last week. Celsius is the largest holder of the token.

Meanwhile, the company’s $ 26 billion in client funds have more than halved since October.

Celsius had previously admitted to losing funds, although it did not specify how much, as a result of the $ 120 million hack of the decentralized financial platform BadgerDAO.

Early Monday, Celsius shocked the market, announcing that all withdrawals, exchanges and transfers between accounts have been suspended due to “extreme market conditions”. In a note addressed to the Celsius Community, the platform also said the move was designed to “stabilize liquidity and operations.”

“We are taking this action today to put Celsius in a better position to meet its withdrawal obligations over time,” the memo said.

Celsius effectively locked its $ 12 billion in cryptocurrencies under management, raising concerns about the platform’s solvency. The news swept over the crypto industry, and was somewhat reminiscent of what happened in May, when a failed US dollar-denominated stackecoin project lost $ 60 billion in value and dragged the broader crypto industry down.

Shares on the cryptocurrency trading platform Coinbase fell 11% on Monday to the lowest since the company was listed on the stock exchange in April 2021.

Binance also pressed the pause button on Monday. The world’s largest crypto exchange stopped bitcoin withdrawals for over three hours “due to a deadlocked transaction that caused a backlog.”

Although CEO Changpeng Zhao said the repair would only take half an hour, he later changed his estimate, saying it would take “a little longer” than first thought. At approximately 11.30 the service was restored.

“An amount $ BTC transactions were stuck due to low TX fees, resulting in a backlog of BTC network withdrawals, ” Binance wrote in a tweet.

In a series of post-mortem tweets, the stock exchange noted this deposit was “unaffected“and explained that the problem originated from planned repair work.

Zhao assured customers that all funds were “SAFU.” It is a reference to the “Secure Asset Fund for Users”, which was created by Binance in 2018 to protect users’ inventory.

During the withdrawal, Zhao tweeted that it was still possible for holders to withdraw bitcoin on other networks such as CEP-20.

Peter Thiel-backed start-up company BlockFi has joined a growing list of crypto companies that reduce the cost of cutting jobs.

On Monday, the company announced that it would reduce the number of employees by around 20%. Before the recent cuts, the company expanded from 150 employees by the end of 2020, to more than 850.

CEO Zac Prince so in a tweet that BlockFi has been affected by the “dramatic shift in macroeconomic conditions”, which has had a “negative impact” on growth.

It is becoming a familiar theme for companies in space.

Late last week, Crypto.com announced a staff reduction of 260 people, just seven months after the company acquired naming rights to the arena that is home to the NBA’s Los Angeles Lakers in a $ 700 million deal. Earlier this month, Gemini said it would lay off 10 percent of the workforce, warning that the industry is in a “contraction phase” known as “crypto winter.”

Meanwhile, Coinbase has extended the employment break in the “foreseeable future” and plans to withdraw some job offers.

SEE: UST’s crash causes some investors to reconsider their crypto investments