The large US-based bitcoin lending provider Celsius Network suspended withdrawals and transfers, citing “extreme” conditions.
The move caused the value of all cryptocurrencies to drop below $1 trillion for the first time since January of last year.
Bitcoin dropped to $23,476 on Monday following the announcement.
Ether, the second-largest cryptocurrency behind bitcoin, fell as much as 16 percent to $1,177, its lowest level since January 2021.
Binance, one of the largest cryptocurrency exchanges in the world, halted bitcoin withdrawals, with CEO Changpeng Zhao blaming a “stuck transaction” for the backlog.
He stated that monies were secure.
Senior financial and markets analyst at Hargreaves Lansdown, Susannah Streeter, remarked, “As inflation shows to be an even more difficult foe to defeat than anticipated, Bitcoin and Ether continue to take significant punishment in the ring.
“They are the primary victims of the flight from risky assets as investors are concerned over soaring global consumer prices.”
Inflation in the United States reached a record 40-year high of 8.6% in May due to rising energy and food prices, as reported on Friday.
The figure exceeded expectations, dashing optimism that inflation had reached its peak.
The fear that the Federal Reserve, the US central bank, will continue to raise interest rates was sparked by soaring US prices.
On Monday morning, US equities began substantially lower, with the S&P 500 inching closer to a 20 percent drop from its peak earlier this year.
The S&P 500 plummeted 2.7% in the first hour of trade, while the Dow Jones Industrial Average fell 625 points, or 2%, to 30,767 by 9:40 a.m. Eastern. The Nasdaq composite decreased by 3%.
