The crypto space took a turn for the worse in mid-June. Bitcoin – the world’s number one digital currency by market cap – fell to about $23,000 per unit, which is exactly where it was in December of 2020. This means all the gains traders witnessed the following year have vanished. It’s almost as if 2021 never existed…
Bitcoin Is in a Very Bad Place
When is this going to end? The heavy losses that bitcoin has incurred in just the last few months alone makes one wonder something that probably no serious trader has ever wondered… Could the asset eventually fall to zero? Is it possible that the coin that began the crypto space will eventually become completely worthless, and could it happen by the end of the year?
The fact that bitcoin could literally lose another $6,000 overnight is rather frightening. At press time, it’s hard to narrow down what could have potentially caused the sudden crash, though Celsius ending all withdrawals may have had something to do with it.
Celsius is a crypto lender that has ultimately paused all withdrawals. The company is worried about the ongoing crypto crash and feels that somehow not giving people access to their money is going to make the problem disappear, suggesting that perhaps executives believe this may all be part of a mass selloff. At the time of writing, the crypto space has lost so much that it is now valued at under $1 trillion.
Vijay Ayyar – vice president of corporate development at crypto exchange Luno – explained:
Since November 2021, sentiment has changed drastically given the Fed rate hikes and inflation management. We’re also potentially looking at a recession given the Fed may need to finally tackle the demand side to manage inflation. All this points to the market not completely having bottomed and unless the Fed is able to take a breather, we’re probably not going to see bullishness return.
He also issued a series dose of gloom and doom when it came to bitcoin, claiming:
We could see much lower bitcoin prices over the next month or two.
Celsius Isn’t Helping
Discussing the recent move by Celsius, he commented:
The Celsius situation is [certainly] adding fuel to the fire. Broadly, the markets were already under pressure from inflation concerns and the interest rate hikes, but with crypto, such contagion events could cause outsized declines given the market is tightly interlinked these days with a variety of inter-connected protocols and businesses.
Celsius isn’t the only company pausing withdrawals. Binance – the largest crypto exchange in the world – has followed suit and is temporarily preventing customers from being able to take money out of the exchange, though the company is claiming this has less to do with price dips and more to do with what it’s calling a “stuck transaction.”