Bitcoin plunges 17% in cryptocurrency selloff

June 13 (UPI) -- Bitcoin plunged below $23,000 Monday, its lowest level since December 2020, as investors scrambled to dump cryptocurrency and other risk assets.

Bitcoin's 17% loss is part of a wider selloff that wiped out more than $200 billion from the cryptocurrency market over the weekend and into Monday. Bitcoin has lost more than 60% of its November high, contributing to an estimated $2 trillion loss in the broader market.

Crypto's total market capitalization, which was nearly $3 trillion in November, plummeted to around $956 billion Monday, according to data from CoinMarketCap.

Crypto lending company Celsius paused all account withdrawals and transfers Monday, citing "extreme market conditions."

Microstrategy, led by bitcoin enthusiast Michael Saylor, whose company is heavily invested in the digital coin, lost 26%.

Investors, who coined the phrase "Crypto Monday", blamed skyrocketing inflation and this week's expected interest rate hikes as the Federal Reserve Board works to control prices.

"Since November 2021, sentiment has changed drastically given the Fed rate hikes and inflation management. We're also potentially looking at a recession given the Fed may need to finally tackle the demand side to manage inflation," said Vijay Ayyar, vice president of corporate development at crypto exchange Luno.

And many investors fear Monday's crypto selloff could be the start of a broader selloff in the digital currency market.

"We could see much lower bitcoin prices over the next month or two," Ayyar said. "The Celsius situation is definitely adding fuel to the fire," which Ayyar said is injecting fears of contagion into the broader market.

Former hedge fund manager and CNBC contributor Jim Cramer talked to tech executives in San Francisco last week and said Monday he believes many Silicon Valley execs think crypto is a con.

While so-called crypto winters have led to past recoveries, Cramer questioned whether "bitco maniacs" would come back to the crypto market this time to "staunch the bleeding."