Bitcoin price slumped over 37.3% in June – the biggest monthly price drop since 2011, in an epic market sell-off that triggered job cuts across the crypto industry and forced many lenders, including Celsius, to halt withdrawals and scramble to line up financial lifelines. The largest cryptocurrency by market capitalization ended the month at $19,925. At the time of writing, BTC is changing hands at $19,178.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price suffers its worst month since 2011
Investor fears over steep U.S. Federal Reserve interest rate hikes were a key catalyst in bitcoin’s price plunge as the Labor Department on June 10 released a report on the consumer price index (CPI), the most widely tracked benchmark for inflation. The CPI showed that inflation rose 8.6% on a year-over-year basis in May, the fastest in four decades.
On June 13, bitcoin saw its biggest single-day drop since March 2020, falling 16% to $21,910. Two days later, the Federal Reserve increased interest rates by 75 basis points, or three-quarters of a percentage point – three times the Fed’s more typical increment in recent years. Bitcoin mostly maintained a $20,000 price level through the remainder of the month but dipped this week to around $19,000 after the Fed renewed inflation warnings.
Bitcoin (BTC) saw its biggest monthly price drop since 2011, 37.3%. Ether (ETH) was down 45% last month. The declines resulted largely from a range of macroeconomic problems that has made traders risk-averse.
A key crypto market metric known as the “Grayscale discount” is widening after the U.S. Securities and Exchange Commission rejected an application for an exchange-traded fund (ETF). The shares of the Grayscale Bitcoin Trust (GBTC) are now trading at a 31% discount to the value of the underlying bitcoin, based on figures posted on the website for Grayscale Investments, fund’s manager. Prior to the SEC’s decision, the GBTC discount was 28.4%.
The widening in the discount is seen as a sign of waning optimism for a conversion anytime soon – the opposite of what was happening last week, when some investors were buying GBTC, betting on the fund’s chances, said Pablo Jodar, financial products manager at Storm Partners, a tech supplier for the crypto industry in Europe.
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