Three mechanisms for crypto contagion

Juneteenth holiday in America gave crypto buffs little time to reflect or rejoice. On June 18th bitcoin reached a low of $17,600—its first tumble below $20,000 since 2020—before recovering a little the next day. The sell-off sparked over $1bn in liquidations, as traders who had borrowed money to make big bets failed to post more collateral. Overall, bitcoin is about 70% below its peak in November; ether, another cryptocurrency, is down by around 80%. As prices have fallen, cracks have appeared in the crypto infrastructure. Babel Finance and Celsius, two crypto lenders, have paused withdrawals after struggling to meet redemptions; their rivals have trimmed their balance-sheets, causing a credit crunch. Third Arrow, a crypto hedge fund, has failed to meet margin calls, and Hoo, an exchange, has halted transactions.