The decade between those milestones saw several booms and busts, with the market value of cryptocurrencies growing to a high of $3 trillion as adoption became more widespread and ultra-low interest rates spurred taking. risks. But the current bear market is highlighted by the amount of cryptocurrency leverage that has been undone, and by the regulatory scrutiny being brought to bear on an asset class now seen by many central banks as a threat to financial stability.
Prices fell again on Thursday, with the token dipping below $19,000. Other more volatile altcoins like avalanche and polygon were seeing losses of around 10%.
The string of bad news adds up to a rebuke to the cryptocurrency ethos of unbridled speculation and boundless innovation: A token that was meant to be pegged to the US dollar has crashed, almost instantly wiping out some $40 billion of market value. Several cryptocurrency lenders were forced to suspend withdrawals, leaving depositors to fend for themselves. And more recently, a major cryptocurrency hedge fund was ordered liquidated after it had built up unsustainable leverage to fuel its bets.
Despite all the pessimism, some analysts point to signs that the market could be close to bottoming. The deleveraging that precipitated the slide in recent months may not have much further to go, according to a note published Wednesday by JPMorgan Chase strategists including Nikolaos Panigirtzoglou. They also mentioned venture capital funding that “continued at a healthy pace in May and June.”
“Bitcoin has had good success over the last dozen years in making cyclical lows every 90 weeks,” Fundstrat technical strategist Mark Newton said. “The lows should be around the corner based on this compound cycle, and one should be on the lookout in the month of July, looking to buy weakness for a healthy rebound, just as sentiment appears to be reaching a bearish turning point.”