Celsius: crypto lender sparks manic meltdown
Total value of the crypto market is now below $1trn – down from almost $3trn in November

Cryptocurrencies have become “emblematic” of the “flight from speculative assets”, as monetary policy has tightened around the world to fight inflation, said Bloomberg. This week delivered another “white-knuckle ride”. The latest trigger for big falls was “crypto lender” Celsius, which sparked panic on Monday when it froze withdrawals, citing “extreme market conditions”. In the ensuing turmoil, the values of all major coins were hit. Bitcoin dropped by 15% to $23,629; ether fell 17%; the ferocious sell-off prompted the world’s largest crypto exchange, Binance, to temporarily suspend bitcoin withdrawals. The value of the total crypto market is now below $1trn, according to CoinMarketCap – from almost $3trn in November.
Celsius, which bragged that its 1.7 million customers could “borrow like a billionaire”, had “seemed to offer the best of all worlds to crypto enthusiasts”, said Lex in the FT. Advertising “an annual percentage yield of 18.63%” on crypto deposits, it paid interest in crypto assets but also let customers borrow US dollars. The lender, which had estimated assets of $12bn in May, may now be insolvent, said Tim Hakki on Decrypt. So what happened? “The short answer: nobody really knows.” But the big worry is contagion. Unlike crypto’s last big blow-out – the collapse of TerraUSD in May – Celsius was intricately connected with many other crypto “ecosystems”.
The fear now, said Martin Peers on The Information, is “a self-perpetuating spiral, as investors liquidate their positions” to conserve capital. Most at risk are “real world” firms that have borrowed against their crypto holdings – such as MicroStrategy, a software business that has invested $4bn in bitcoin. This punishing bust may have much further to run.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Work life: Caution settles on the job market
Feature The era of job-hopping for bigger raises is coming to an end as workers face shrinking salaries and fewer opportunities to move up
By The Week US
-
Saving the post office
Feature The U.S. Postal Service is facing mounting losses and growing calls for privatization. Can it survive?
By The Week US
-
Safe harbor: Gold rises as stocks sink
feature It's a golden age for goldbugs
By The Week US
-
What is the Mar-a-Lago accord?
Talking Point A Maga economic blueprint proposes upending the global financial system. Could it fly?
By The Week UK
-
Elon Musk: has he made Tesla toxic?
Talking Point Musk's political antics have given him the 'reverse Midas touch' when it comes to his EV empire
By The Week UK
-
Texas vs. Delaware: See you in court
Feature Delaware risks losing its corporate dominance as companies like Tesla and Meta consider reincorporating in Texas
By The Week US
-
The collapse of El Salvador's bitcoin dream
Under the Radar Central American nation rolls back its controversial, world-first cryptocurrency laws
By Harriet Marsden, The Week UK
-
Javier Milei's memecoin scandal
Under The Radar Argentinian president is facing impeachment calls and fraud accusations
By Chas Newkey-Burden, The Week UK