On Monday morning, the cost of bitcoin jumped sharply by more than 12% and exceeded the $20,000 mark. According to the Binance cryptocurrency exchange, at 23:28 London time (previous day), the BTC price reached $20,600. At the time of writing, the main virtual asset is trading at $20,075.
At the same time, the cost of bitcoin decreased to $18,707 the day before. The fall of the digital currency below $19,000 was recorded for the first time since November 2020.
Bitcoin fell 6.57% on Saturday and broke through the important psychological level of $20,000, reaching $19,450 and testing the range near the $18,000 mark.
By the way, BTC took the course for a permanent negative trend on June 7, when it was trading at $31,500. Since then, cryptocurrency quotes have fallen by more than 30%. Since the beginning of this month, the coin has already lost 57% of its value, and by 37% at the beginning of 2022.
The price of the first cryptocurrency decreased by 15.59% in May. Over the past two months, the cost of BTC has fallen 1.6 times to $29,000 from $45,800. At the same time, over the past spring, bitcoin dipped by 27%.
Since last November, when the coin updated its historical record, soaring above $69,000, the cryptocurrency has already lost about 70% in price.
Altcoin market
On Monday, the main competitor of bitcoin, the altcoin Ethereum, also began the trading session with an increase and by the time of writing the material had reached $1,089. At the same time, on June 18, the price of the coin was dropping to $881 at the moment, the lowest since the beginning of January 2021.
As for cryptocurrencies from the top ten by capitalization, over the past 24 hours, all coins, except for the Binance USD stablecoin, showed a confident positive. At the same time, the Ethereum altcoin (+12.44%) turned out to be the key growth leader here.
At the end of the week, all the largest cryptocurrencies were in the red zone, and bitcoin was the main outsider in the top ten virtual coins (-21.19%). The list of increases here was topped by the Solana coin (+13.09%).
According to CoinGecko, the world's largest virtual asset data aggregator, over the past 24 hours, Synthetix Network (+35.3%) topped the list of leaders in the top 100 most capitalized digital assets, and USDD stablecoin took the first place in the decline list (-0.7%).
Following the results of the past week, the main outsider among the top 100 cryptocurrencies was the Chain coin (-43.8%), and the key favorite was Bitcoin SV (+30.1%).
According to CoinGecko, over the past weekend, the total capitalization of the crypto market fell to $885 billion, the lowest level since January 2021. By the way, back in November of the past year, this figure exceeded $2.9 trillion. At the same time, the market capitalization of stablecoins has also significantly decreased, which indicates that investors are withdrawing capital from the crypto sector as a whole.
Reasons for the protracted collapse of the crypto market
Analysts say that the key downside factor for BTC today is the decrease in investor appetite for risky assets in the face of the latest inflation data in the United States.
Thus, according to the US Federal Bureau of Labor Statistics, the annual inflation rate in the country rose to 8.6% in May, which was the worst indicator over the past 40 years, since the winter of 1981. By the way, earlier market analysts predicted that the annual inflation rate would remain at the April level of 8.3%.
An additional reason for the decline in the virtual asset market was the decisive steps taken by the US Federal Reserve in the area of tightening monetary policy.
Thus, following a two-day meeting on June 14-15, the Fed raised the key rate by 75 basis points at once - up to 1.50-1.75%. Such a spectacular increase in the indicator by the central bank has not been seen since 1994.
As part of a press conference following the central bank meeting, Fed Chairman Jerome Powell also said that next month the level of the base rate could be increased by another 50-75 basis points.
The active decline in the virtual coin market last week coincided with the sharpest weekly percentage collapse of the US stock market over the past two years. Traditionally, the value of BTC moves in much the same way as other risky assets, in particular securities of technology companies.
In recent weeks, analysts have even more emphasized the high level of correlation between the stock market and crypto assets amid tense geopolitical conflict in Eastern Europe and tough moves by the US Fed.
An equally important catalyst for the loud collapse of virtual assets is the recent loud collapse of the algorithmic stablecoin Terra USD (UST) and the digital token Luna, when the cryptocurrency market lost billions of dollars over several weeks.
Clear evidence of the serious vulnerability of digital assets was the recent announcement by some cryptocurrency companies that they were laying off thousands of employees amid a massive disposal of risky assets by investors.
So, recently the companies Celsius, Crypto.com, Coinbase, Gemini, BlockFi and others began to rapidly reduce costs due to the active decrease in trading volumes by participants in the crypto market.
Last week, the CEO of the Singapore-based Crypto.com exchange, Kris Marszalek, announced a 5% reduction in staff (260 people).
The American cryptocurrency exchange Gemini spoke about the imminent dismissal of 10% of the staff.
The Coinbase exchange went even further, whose CEO, Brian Armstrong, announced plans to lay off a fifth of his staff (about 18%) due to high volatility in the virtual asset market.
As part of the staff optimization of the BlockFi crypto-lending platform, it is planned to reduce staff by about 20% (about 850 employees).
At the same time, the Celsius Network cryptocurrency exchange turned out to be on the verge of insolvency. Last Monday, the American lender announced the suspension of the possibility of withdrawing, exchanging and transferring funds between accounts "due to extreme market conditions." Following this statement, the project token instantly collapsed by 50%.
Soon, one of the main competitors of Celsius - Nexo - announced its readiness to buy a loan portfolio of the cryptocurrency platform. So far, however, Celsius has turned to one of the largest international financial conglomerates, Citigroup, for help in finding possible financing options.
Crypto-hedge fund Three Arrows Capital found itself in an equally difficult situation, which began to actively sell assets and seek help from other firms.
The only positive news amid the global optimization of the state was the message that the largest cryptocurrency exchange Binance is opening 2,000 new vacancies.
