Could this be the end of what was once a billion-dollar industry just three years ago?
Despite a solid rally in the previous week, in mid-July Bitcoin experienced something of a price crash. It fell to around $30K even after several weeks of trading above $31,000 per unit.
Bitcoin Endured Some Slips
The crypto market took some nasty hits, such as non-fungible tokens (NFTs) selling off drastically. Many major collections have seen their prices drop as more and more people begin to question whether these assets are worth anything. Pixel art has always been in the air, but now some are beginning to see that the value doesn’t really exist.
While Bitcoin and many other assets have seen price declines, not all analysts are concerned. There are several who seem to believe that things are not only in good shape, but that slight fixes like these are healthy for the industry. K33’s Bendik Schei explained in a recent note, “After Bitcoin’s massive 14 percent gain last week, the market took a healthy pause.”
The fall in Bitcoin could potentially contribute to the Federal Reserve raising borrowing costs again after private payroll data shows things are much better than initially anticipated. Wall Street is now starting to see bitcoin and many other assets in a whole new light according to Matt Maley, the chief marketing strategist at Miller Tabak + Co. He explained it in a recent interview:
“Higher rates are having an impact. The bulls were already disappointed that Bitcoin could not break out after the euphoria surrounding the BlackRock ETF presentation. so this recent jump in interest rates is pouring salt in the wound of those bulls.”
One of the problems right now is the existence of various cryptocurrency companies suing other cryptocurrency companies, which creates instability and turmoil in the market. Gemini Trust Co., for example, is suing Digital Currency Group Inc. and its CEO, Barry Silbert, alleging that the company engaged in “fraud and deception” after Gemini obtained several frozen funds from the company.
BTC in August 2023: Recent News
On August 18 around 9:35pm UTC, the Bitcoin price suddenly plunged more than 8% in a span of 10 minutes, taking the broader crypto market with it, leaving many in the crypto community scratching their heads.
EToro market analyst Josh Gilbert attributed the drop to a report that SpaceX may have sold some or all of its $373 million worth of bitcoin holdings, which stemmed from an Aug. 17 Wall Street Journal article.
Tina Teng, a market analyst at CMC Markets, shared a different view, pointing to the recent rise in government bond yields as the main cause of the sell-off. Teng explained that rising bond yields often show reduced liquidity for the broader market.
However, while Teng dismissed the Evergrande crisis as a major reason for Bitcoin’s price swing, Matrixport’s head of research Markus Thielen claimed that the risk of a Chinese yuan devaluation may have played a role in the massive sale.
Bitcoin had rallied slightly since the crash, gaining 1.2% in two hours, according to data from TradingView. At the time of publishing this article, bitcoin was changing hands for $26,619. Its price appears to have been boosted by news that the SEC could approve an Ethereum futures ETF product in October.
By Leonardo Pérez
