Crypto industry fears contagion as bitcoin plunges

The cryptocurrency industry was on edge on Monday as bitcoin held just above $20,000 and investors feared that problems at major crypto players could unleash a wider market shakeout.

Bitcoin, the world's biggest cryptocurrency, dropped on Saturday to as low as $17,592.78, falling below the key $20,000 level for the first time since December 2020.

It picked up slightly during London trading hours on Monday, at around $20,510 at 1232 GMT. But it has still lost 55 per cent of its value this year and 35 per cent this month alone in the cryptocurrency sector's latest meltdown.

Bitcoin's fall follows problems at several major crypto firms. Further declines, market players said, could have a knock-on effect as other crypto investors are forced to sell their holdings to meet margin calls and cover losses.

Crypto hedge fund Three Arrows Capital is exploring options including the sale of assets and a bailout by another firm, its founders told the Wall Street Journal in a story published Friday, the same day Asia-focused crypto lender Babel Finance said it would suspend withdrawals.