Major cryptocurrencies suffered big losses on Monday. As I write this, bitcoin is down 14 percent over the last 24 hours, while ether is down 16 percent. Other major cryptocurrencies—including solana, dogecoin, and litecoin—are also down by double digits, according to CoinMarketCap.

The cryptocurrency crash is part of a broader market sell-off. The S&P 500 stock market index fell almost 4 percent on Monday amid fears of faster interest rate hikes from the Federal Reserve. High interest rates put downward pressure on all assets, including stocks and cryptocurrencies.

Another big factor that may have spooked cryptocurrency traders was the Monday announcement by crypto lender Celsius that it was suspending withdrawals. The company said this was the result of “extreme market conditions.”

Celsius is effectively an unregulated cryptocurrency bank. Customers can deposit cryptocurrencies with Celsius and then borrow dollars against those holdings. Customers can also earn interest on cryptocurrency deposits, with the company’s website advertising interest rates as high as 18 percent for some cryptocurrencies. That number is far more than Americans can earn from conventional banks. Celsius says it has 1.7 million customers.

A January Bloomberg article reported that Celsius had inspired loyalty from some of the platform’s users:

In testimonials posted last year on Twitter as part of a contest in which customers shared their ‘Celsius Story,’ many said they had entrusted Celsius with their life savings. One said he took out home equity and cashed in his work pension and his savings for his kids’ education to put the money into the company’s accounts. Another said it let him quit his job to move closer to his kid.

In a January Bloomberg article, Celsius CEO Alex Mashinsky “told Bloomberg Businessweek that Celsius is able to pay such high yields because it passes along most of its earnings to its users. He said it’s the traditional financial system that’s ripping people off by taking their deposits, using them to make money, and then claiming it can only pay tiny interest rates.”

“Somebody is lying,” Mashinsky said. “Either the bank is lying or Celsius is lying.”

While Celsius offers higher interest rates than a traditional bank, Celsius deposits are not protected by the Federal Deposit Insurance Corporation, which provides a financial backstop for deposits in conventional banks. This means that if Celsius were to get into financial trouble, some customers might not get all their money back.

In a blog post last week, Celsius swatted away rumors that it was having financial difficulties.

“At this already challenging time, it’s unfortunate that vocal actors are spreading misinformation and confusion,” the company wrote. “They have tried unsuccessfully, for example, to link Celsius to the collapse of Luna and falsely claim that Celsius sustained significant losses as a result.”

That was a reference to last month’s news that terra, an “algorithmic stablecoin,” had proven not to be so stable in practice. Terra’s value was supposed to be pegged to $1, with the related cryptocurrency luna supposedly providing a backstop for this peg. But the whole house of cards came crashing down last month amid a broader cryptocurrency sell-off.

Celsius has grown rapidly over the last year, attracting increased regulatory scrutiny. Last September, regulators in several states opened investigations into the company’s business practices, arguing that the company’s lending products may constitute unregulated securities.

Celsius hasn’t provided details on the “extreme market conditions” that led the company to suspend withdrawals. Celsius claims it is working diligently to resume withdrawals, but users have good reason to worry about the company’s financial health.

Across the cryptocurrency sector, companies are tightening their belts with expectations that recent price declines might last for a while.

On Friday, the cryptocurrency exchange and wallet company Crypto.com announced it was laying off 260 employees, about 5 percent of its workforce. A week earlier, the Gemini cryptocurrency exchange, which the Winkelvoss brothers founded, announced it was cutting its workforce by 10 percent. The brothers blamed the cuts on “turbulent market conditions that are likely to persist for some time.”

One of the biggest cryptocurrency companies, Coinbase, recently announced that it was freezing all new hiring. That included withdrawing some offers that job candidates had already accepted. Coinbase’s stock price has fallen more than 80 percent since its peak last November.

The steady drumbeat of bad news has led to discussion about the start of another “crypto winter.” The cryptocurrency world has experienced at least three of these periods. During this time of retrenchment, it’s common for a significant number of cryptocurrency-related projects and companies to fail.

Each previous crypto winter has been followed by a thaw and then a new boom. Most recently, bitcoin fell to around $3,200 in late 2018 before soaring above $60,000 in 2021. Cryptocurrency boosters hope that history repeats itself, with today’s low bitcoin price leading to new price records a few years down the road.

But there’s no guarantee that will happen. At some point, the crypto sector will reach a saturation point, after which cryptocurrency prices may start to behave more like other conventional assets—rising during booms and falling during downturns but not necessarily delivering outstanding returns for those who hold them over the long term.

Tim Lee was on staff at Ars from 2017 to 2021. In 2021, he launched Full Stack Economics, an independent email newsletter about the economy, technology, and public policy. You can subscribe to his newsletter here.