Bitcoin has experienced its biggest quarterly decline in over 10 years

Bitcoin is on track for its worst quarter in more than a decade, as hawkish central banks and a series of high-profile cryptocurrency explosions are emotional.

The 58% plunge in the largest cryptocurrency is the largest since Bitcoin was still in its infancy in the third quarter of 2011, according to data compiled by Bloomberg. The decade between these features has featured some booms and busts, the market value of all tokens has been more widely adopted, and ultra-low interest rates have spurred risk-taking, so last year 11 It swelled to a peak of $ 3 trillion (€ 2.9 trillion) in the month. However, the current bear market stands out with the amount of unleashed crypto-leverage. In addition, regulations are being scrutinized for asset classes that many central banks now consider to be a threat to financial stability.

Its total market size is currently around $ 900 billion (Euro 86.1 billion), the fast-growing Terra crypto ecosystem has collapsed to near zero, and the heightened liquidity crisis has left some prominent companies in bankruptcy. I faced it. Bitcoin’s current trading level has fluctuated back and forth above $ 20,000 (€ 19,132) over the weeks, while even some of the best-funded cryptocurrencies have laid off. Announced the band of.

Prices fell again on Thursday, with the world’s largest token by market capitalization falling by more than 6%, breaking the second $ 19,000 (€ 18,176) in two weeks. The more volatile altcoin got worse, and the avalanche and polygons each fell by more than 10%.

Although not directly related to price declines, the Securities and Exchange Commission refuses to bid to turn Grayscale Bitcoin Trust (GBTC), one of the world’s largest Bitcoin funds, into a publicly traded product. As a result, the atmosphere of Bitcoin has deteriorated. Wednesday. Another knock came in the form of reports that Grayscale’s sister company Genesis Trading could face hundreds of millions of dollars in losses from its exposure to struggling crypto lenders.

The recent bad news beat shows widespread condemnation of the love for unrestricted speculation and freewheeling innovation in cryptography. Leverage attachment was at the heart of the idea, as lenders and hedge funds also split their clients’ assets into higher-risk bets and buckled as soon as prices fell.

But because of all the darkness, some analysts have pointed out signs that the bottom may be near. JPMorgan Chase and Company strategists, including Nikolaos Panigilzoglow, said in a note released Wednesday that the leverage elimination that has accelerated the rout in the past few months does not need to be carried out anymore. Said it might be. They also pointed out venture capital funding that “continued at a healthy pace in May and June.”

“Bitcoin has been very successful over the last decade by hitting periodic lows every 90 weeks,” said Mark Newton, technical strategist at Fundstrat. “According to this cycle composite, the lows should be right there. Just as sentiment seems to have reached a bearish turning point, buy bearish in July and seek a healthy rebound. You need to be vigilant. “

© 2022 Bloomberg LP Bitcoin has experienced its biggest quarterly decline in over 10 years

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