In the world of cryptocurrencies, experts often say that when an asset has lost 99% of its value, it can drop another 99%. For several weeks, the owners of digital tokens have felt that they have hit rock bottom, but the days go by and look the same: Bitcoin has lost 27% in a week and almost 70% since the record 10 November 2021, date it had reached $69,000. Only yesterday it fell to $20,822 at its lowest point before rising a bit. This morning it stood at $22,400.
According to Simon Peters, market analyst at eToro, this sudden drop is due to a “fear of accelerating inflation in the United States”he said in a press release. Monthly US inflation fell from 8.5% to 8.3% in April, suggesting that price increases had reached a ‘peak’, but another hit of 8.6% on Friday shook up stock and crypto markets . †
He believes the correlation with the stock market is becoming increasingly apparent: “A large part [de la chute] is due to institutional holders calibrating their risky assets in the same way, be it tech stocks or bitcoins. †
Craig Erlam, market analyst at Oanda, shares his view on the macroeconomic aspect. According to him, we went into a “cost of living crisis”† He still believes that the change of tone at the European Central Bank, which has finally decided to raise its key rates, is affecting the cryptocurrency market.
Celsius accentuates autumn
“The $20,000 suddenly seems very vulnerableHe wrote. The worst may be yet to come […] Market conditions were already sub-optimal – high risk aversion and anticipation of higher interest rates – but add to that a major cryptocurrency lender freezing withdrawals and it really is the perfect storm. †
He refers to the problems of the company Celsius, which specializes in paid savings and borrowing of digital assets. Indeed, it has suspended withdrawals since yesterday, exacerbating the climate of panic in the markets. Worse, the largest exchange in the world, Binance, also in the pass had to temporarily stop bitcoin transfers† With the latter the interruption lasted only three hours on Monday, but with the former it is still impossible to get your money back.
†@CelsiusNetwork pauses all withdrawals, swaps and transfers between accounts. Acting in the best interests of our community is our top priority. Our activities continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2
— Celsius (@CelsiusNetwork) June 13, 2022
“Everything suggests that Celsius would therefore be insolvent, which would be another tsunami in the ecosystemJudge Pierre-Yves Dittlot, CEO and founder of Ledgity. […] In this case, we would be dealing with poor risk management and not with questioning the underlying technology and innovation. †
As a reminder, bitcoin had already lost 80% of its value after the 2017-2018 bubble. The dramatic fluctuations from year to year are not uncommon. “A $20,000 prize continues to be higher than all periods prior to the year 2021”puts Alexandre Stachchenko, blockchain director at KPMG, into perspective. “The short-term trend is determined by trends that follow the market, but in the long-term, if you look at the fundamentals, bitcoin is rising.” While many savers unfortunately lost money in this crash, others are calm and express themselves calmly on social networks.
— Mr-TK Mining (@MiningTk) June 13, 2022
— ????????crypto_hello???????? (@crypto_hello) June 13, 2022
Newcomers call those who hit bear peak in 2022 for $23k and $1k2 “super happy”
This is also the reality of between 2 cycles pic.twitter.com/NDku5HKKEB
— CryptoMatrix (@CryptoMatrix2) June 13, 2022