Summer is often a mixed time for cryptocurrency. In both 2018 and 2019, assets like bitcoin and Ethereum ultimately garnered mild gains here and there that caused several analysts and financial heads to think that the space was entering a period of recovery following massive prior drops.
Cryptocurrency Sees Its Figures Drop During June
This time around, however, cryptocurrency has been suffering heavily, and it does not look like things are on the verge of recuperating. Many of the world’s leading digital currency exchanges – including Coinbase, Kraken, Bitstamp, and Binance – have seen their daily trading volumes drop by as much as 40 percent in recent weeks. Per stats from market data provider Crypto Compare, this can be attributed to price falls and excess volatility.
However, according to Teddy Vallee – chief investment officer at Pervalle Global – China’s behavior towards cryptocurrency and its constant threats against bitcoin miners and influencers have proven to be the most dangerous for digital assets, and he believes the nation is the primary reason why bitcoin continues to slip like it never has before.
In a recent interview, he stated:
The Chinese crackdown has caused a lot of fear, which is showing up in markets. The digital asset ecosystem got punched in the face, so it is currently up against the ropes versus fighting in the middle of the ring. Typically, when you have large selloffs, participants are quite fearful and pull back their chips.
At one point, China accounted for close to 65 or even 75 percent of the world’s bitcoin and crypto mining projects, though as the country began to strike down all operations, miners saw themselves – prior to leaving the country altogether – transact less and less with each passing moment, which ultimately led to a downfall in revenue and an overall decrease in unit prices.
Nick Mancini – research analyst for crypto platform Trade the Chain – mentioned:
Once these stories began to permeate through the market in May, sentiment dropped to single-digit levels on a scale of one to 150. Eventually, this resulted in the trading volume for bitcoin dropping by nearly half since its peak, and it is further down 32 percent from its June average.
Things May Be Better Than They Seem
While things may appear all-around terrible, Clara Medalie – research lead at crypto market data provider Kaiko – says that this June was still much stronger than it has been over the years. She commented that June 2021 featured considerably stronger volume and prices than 2020, saying:
Volumes plunged in June on pretty much every exchange. However, overall volumes are still magnitudes greater than they were one year ago today. June volume still ranks in the top five months of volume ever recorded. While the drop was steep compared with May, it is an unfair comparison because May saw the highest volumes ever recorded due to unprecedented liquidation events.