Bitcoin saw its share of battles in June this year, losing a whopping 13% on the 18th of the month alone and dipping below $20,000 to hit lows of $17,593. This activity took place alongside a major slump in US equities – in fact the biggest weekly slump in two years – on heightened worries about a recession and rising US interest rates. When institutions bought Bitcoin, it was often to offset losses in other stocks, but Bitcoin “Has not demonstrated that it is an uncorrelated asset,” says Michael Purves of Tallbacken Capital.
Several companies in the blockchain sector were suffering, for example Coinbase Global Inc., which was forced to lay off 18% of its staff, Gemini Trust Co. (which cut 10% of its staff) and Crypto.com. On June 12, Celsius Network Ltd., a major cryptocurrency lending platform, said it should stop all transfers, withdrawals and exchanges due to its failure to provide promised returns to customers. These recent shutdowns have raised concerns among analysts, such as Framework Ventures’ Vance Spencer, about future industry-wide shutdowns, who said, “There will be a lot of companies going bankrupt. Above all, it was the disappearance of the Terra USD stablecoin and the Luna token, which was another force behind the news of Bitcoin prices losing 30% on the 19th of the month. If you are considering investing in crypto with iFOREX as CFDlet’s review some bitcoin news and unpack the crypto story for June.
The world’s largest crypto exchange, Binance, lost $1.6 billion following the collapse of Terra. Binance had been an active promoter of the stablecoin Terra as a relatively safe way to benefit from meme coin buzz. Binance CEO Changpeng Zhao’s net worth was reduced from $96 billion to $11 billion during the recent crypto winter, and the company has also been investigated by the US Department of Health. Justice and the Commodities Futures Trading Commission. The attitudes of official regulators towards crypto are still being worked out and “regulators have already signaled their willingness to make an example of what they consider to be the worst performers,” in the words of Bloomberg. . Binance’s BNB token was worth around $220 towards the end of June, although its original price in 2017 was just 15 cents. Binance’s growth since then came, initially, from their service of providing traders with unregulated access to lesser digital tokens like Dogecoin. Then they started offering leveraged financial products tied to these coins.
Bitcoin, Ether and Blockchain
On June 22, news of Bitcoin plunging 4.8% to $19,832 made it underperform surrounding stocks, and Ether fell 6.1% to $1,053, Solana, Cardano, Dogecoin and Polkadot all losing ground in risk. – downpour prevailing at the time. “Bitcoin did ‘bottom’ but probably not ‘bottom’,” suggested Mark Newton of Fundstrat Global Advisors. The next day, however, Bitcoin rebounded 4.7% to retake the $20,000 level and Ether arrived, up 6.4%. The Binance CEO concluded that the “stunts” recently seen in the crypto market were less and less pronounced. Still, due to the hawkish trend in Fed policy, “we can expect more volatility in Bitcoin price,” Bitfinex said.
An important distinction to make is between the cryptocurrency market and industries that use blockchain technology. In June, Mansoor Al Mahmoud, CEO of Qatar Wealth Fund, expressed his desire to “[Explore] opportunities in the block chain. It is the space that interests us, not the currency itself”. Indeed, according to Vance Spencer of Framework Ventures, the current crypto decline may be shorter-lived than the 2018-20 decline due to developments in the use of blockchain technology since then.
For readers considering investing in crypto with iFOREX as a CFD, crypto prices will just have to be watched on a day-to-day basis, and “Bitcoin could drop below the $10,000 level this year,” suggests Jay Hatfield of Capital Management. On the other hand, some of the “big rally crypto cheerleaders…are still bullish on the long run,” says Edward Moya of OANDA. An interesting theme to follow in the times to come will be the potentially growing number of uses of blockchain technology in decentralized finance and the world of non-fungible tokens (NFTs), and how this may affect Bitcoin prices. In the meantime, “the arguments for institutions to buy the dip are more contested now, given that the utility of Bitcoin has yet to be proven,” says Michael Purves.