Summer Slump: Bitcoin Registers Worst Month on Record

July 1, 2022 Topic: Bitcoin Blog Brand: Techland Tags: BitcoinCryptocurrencyInflationRecessionEthereum

Summer Slump: Bitcoin Registers Worst Month on Record

The pain continues for investors of bitcoin and other cryptocurrencies.

 

Bitcoin has completed its worst month on record, shedding nearly 40 percent of its value in June alone, according to CNBC. Meanwhile, Ethereum, the world’s second-largest cryptocurrency by market capitalization, ended the same period down by nearly 50 percent.

At market close on Thursday, bitcoin was sitting below $19,000, which represents a decline of about 58 percent this year and 72 percent from its all-time high of $68,990.90 that was reached last November.

 

“Bitcoin continues to be under pressure as other assets are,” Yves Longchamp, head of research at digital asset-focused SEBA Bank, told the business news outlet via email.

“The mix of high inflation, rising interest rates and recession weigh on cryptocurrencies,” he continued.

Despite the recent massive sell-off, there are fears that bitcoin could tumble even further. Ian Harnett, co-founder and chief investment officer of Absolute Strategy Research, recently told CNBC’s “Squawk Box Europe” that the world’s top cryptocurrency could potentially plummet to $13,000.

“We would still be selling these kinds of cryptocurrencies into this environment. It really is a liquidity play. What we’ve found is it’s neither a currency, nor a commodity and certainly not a store of value,” he said.

“In a world where liquidity is plentiful, the bitcoins of this world do well. When that liquidity is taken away—and that’s what the central banks are doing at the moment—then you see those markets come under extreme pressure,” he added.

In explaining his bearish call, Harnett noted that past crypto rallies have shown bitcoin to fall roughly 80 percent from all-time highs. Such a drop later this year “would take you back to about $13,000,” which he deemed to be a “key support area.”

Still, there are some bitcoin enthusiasts who see the sell-off as an amazing buying opportunity.

“If your timeframe is a week, or a month, or even a quarter, I think there’s still significant volatility,” Matt Hougan, chief investment officer at Bitwise Asset Management, told CNBC.

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

Meanwhile, as reported by Fox Business, it was also a rough first half of the year for U.S. equities. The S&P 500 lost more than 20 percent, its worst performance since 1970, while the tech-heavy Nasdaq fell nearly 30 percent, its worst performance in history.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.