Crypto: Binance 'temporarily' pauses bitcoin withdrawals as market tanks

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·Finance Reporter, Yahoo Finance UK
·2 min read
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Souvenir tokens representing cryptocurrency Bitcoin plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration
Bitcoin's price has plunged amid US inflation fears. Photo: Dado Ruvic/Reuters

The world's largest crypto exchange Binance has "temporarily" halted bitcoin (BTC-USD) withdrawals after the token fell to the lowest in about 18 months amid a broad sell-off following a sharp rise in US inflation.

Binance cited a transaction processing issue, adding that trading in other cryptocurrencies was not affected by the pause.

The move comes after crypto lending platform Celsius announced it was pausing all withdrawals and transfers amid “extreme market conditions,” as its CEL digital token plunged nearly 50% late Sunday.

The world’s largest cryptocurrency tumbled as much as 17% in under 24 hours to $22,603 (£18,540), and is down more than 49% this year. It is down 15.2% to $23,815 at the time of writing.

The global crypto market cap is down to $1.03tn, a 20% drop for the week, according to CoinMarketCap.

Peter Schiff, chief economist at Euro Pacific Capital, warned against buying the dip.

In November last year, bitcoin hit a high of $69,000 but the digital asset is not alone in the red.

Read more: UK economy shrinks in April as households struggle against cost of living

Ethereum (ETH-USD) fell more than 16% to around $1,228 and dogecoin (DOGE-USD) shed about 17%.

Not a single cryptocurrency in CoinMarketCap’s top 100 rankings experienced gains over the last day, making it one of the biggest crashes in recent memory.

“Crypto spent much of the weekend in the reds, following Friday’s CPI report that showed inflation rising. Crypto investors were largely expecting the US central bank to boost rates a half percentage point later this week in a bid to quell inflation, leading to a major 'risk-off' sentiment in the markets," said the CoinDCX research team.

Read more: Live crypto prices

Traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May.

“Going into 2023, we expect major central banks to continue their trajectory of quantitative tightening and policy rate hikes — effectively limiting any significant upside unless we see more convincing trends in economic recovery," added the CoinDCX research team.

Watch: What are the risks of investing in cryptocurrency?