Bitcoin Just Had The Worst Month In Crypto’s History – Here Is Why

Bitcoin had just finished its worst month on record, dropping more than 38% of its value in June. Ether fell around 47 percent during the same period.

Due to the slump in digital assets, confidence in the crypto market, in particular, has been shaken in recent weeks as significant companies confront solvency difficulties.

The popular US dollar-pegged stablecoin project UST — and its sister token luna — crumbled in May, totaling a $60 billion loss. Then, in early June, lending firm Celsius, which had promised consumers significant rates on digital currency deposits, halted customer withdrawals, claiming “extreme market conditions.”

In other news, major crypto hedge fund Three Arrows Capital defaulted on a $670 million debt Monday. On Thursday, CNBC reported that FTX intends to buy crypto lender BlockFi for $25 million. According to one source, this is 99 percent less than BlockFi’s previous private valuation, effectively “wiping out” the company’s equity owners.

All of this comes from layoffs at leading crypto firms, like Coinbase, whose shares plunged around 40% in June, marking its fourth consecutive negative month.

“There is still an aspect in crypto that we are waiting to see if another shoe will drop, if another entity will fail if the credit cascade will continue,” said Matt Hougan, chief investment officer at Bitwise Asset Management, in an interview.

“I think we have to get through the Fourth of July weekend and get through that quiet period in the market before we build in the second half of the year.”

Unfortunately, high volatility is the cost of doing business in the digital asset market. Bitcoin has endured two lengthy spells of low prices in the last decade before rebounding.

Nonetheless, many bitcoin supporters predict another comeback and are purchasing at what they believe will be record lows.

MicroStrategy purchased an additional 480 bitcoin for around $10 million on Wednesday, raising the company’s total holdings of the world’s most popular digital coin to approximately $4 billion, according to Michael Saylor.

“If your timeframe is a week, or a month, or even a quarter, I think there’s still significant volatility,” said Hougan.

“If you have a time horizon measured in years, then yes, this is a great opportunity to think about entering the market.”

Leave a Reply

Your email address will not be published. Required fields are marked *