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.)

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

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

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