The sell-off in cryptocurrencies continued on Wednesday, with the price close to the $20,000 mark.
According to data from coin metrics, the price of the digital currency fell 9% in 24 hours. The world's largest digital currency has lost 70% of its value since the start of the year.
Fears of inflation, interest rate rises, and issues at a key player in the space have caused the digital token market to plummet.
The Federal Reserve is expected to hike rates by 75 basis points this week, which has spooked the stock market and other risky assets.
The risk-off environment affecting markets has caught up with the growth of the digital currency.
The impact of a worsening macroeconomic trend in which inflation is rising because of supply chain issues is what we are experiencing.
The company may soon become insolvent after blocking users from accessing their funds.
There is concern that a possible liquidation of Celsius may lead to more pain for the industry.
The analyst at U.K. based digital asset broker Global Block said that a liquid cascade could occur if Celsius collapses.
The staked ether token is offered by Lido Finance and is meant to be worth the same as ether.
In order to earn rewards on their ether holdings, investors buy staked ether. The original ether is locked up in a vault that can't be accessed until the ether is upgraded.
According to a note published Monday, Celsius may have to sell their holdings to satisfy redemptions since the underlying ETH is locked up.
The collapse of two popular token last month left the market in a state of disarray. Key players in the space are bracing for a long term bear market.
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