Flagship cryptocurrency asset, Bitcoin, has seen its worst quarterly loss in 11 years with price and activity on the blockchain both plunging over the last three months as actions from central bankers in increasing contractionary monetary policies made investing in riskier assets less attractive.
The second quarter ending June 30 saw Bitcoin’s price fall from $45,538.68 at the start of the quarter to trade at $19,784.73 on the 30th of June, representing a 56.55% loss for the quarter. It’s the steepest price fall since the third quarter of 2011 when BTC fell from $15.40 to $5.03, a loss of over 67% and worse than the bear markets of 2014 and 2018 when Bitcoin’s price slumped 39.7% and 49.7% in their worst quarters respectively.
The past quarter saw eight weekly red candles in a row for Bitcoin and the month of June saw a drawdown of 37.77%, the heaviest monthly losses since September 2011 which saw the price fall more than 38.5% in the month.
What you should know
- There are signs that investors are keeping their powder dry or they’ve run out of funds, during the bear market. Activity on the blockchain is taking a dive with Bitcoin’s spot volume, the total amount of coins transacting on the blockchain, dropped over 58.5% in just nine days according to a June 29 analysis from Arcane Research.
- But it’s not just crypto markets in turmoil. Thanks to sky-high inflation and rising interest rates the traditional stock market has also taken a pounding, with some calling it the “worst quarter ever” for stocks.
- Charlie Bilello, CEO of Financial advisory firm Compound Capital Advisors shared a chart on Twitter showing the S&P 500 index was down 20.6% in the first half of 2022, the worst start to the year for the index since 1962 when price return was -26.5%.
- The difficult economic conditions have seen a swath of staff layoffs from crypto companies including Gemini, Crypto.com and BlockFi. Most recently the crypto and stock trading platform Bitpanda cut its employee count by approximately 277 full-time and part-time employees.
- Crypto is closely tied to the wider tech sector and the tech-heavy NASDAQ composite index has fallen by almost 22.5% over the second quarter.
A “Tech Layoff Tracker” from technology jobs board TrueUp reveals over 26,000 tech employees across 200 companywide cutbacks just in June alone. Also Over the quarter, 307 layoffs impacted over 52,000 staff with one of the largest coming from Elon Musk’s Tesla, with 3,500 impacted. Crypto exchange Coinbase features twice, firstly for its June 2 hiring freeze and job offer rescission of nearly 350 people and second for its June 14 staff layoff, affecting 1,100 individuals.
This period in the crypto space has earned the title, “crypto winter,” as reports from CoinGecko, compiled by CoinGoLive, revealed that the current bear market has seen a whopping 72 out of top-100 tokens by market capitalization fall more than 90% from their respective all-time highs, in which most of them hit last year.