EconomyBitcoin is on track for biggest quarterly drop in...

Bitcoin is on track for biggest quarterly drop in more than a decade

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Bitcoin is set to suffer its worst quarter in over a decade as more aggressive central banks and a series of high-end cryptocurrency blowouts have weighed on sentiment.

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The 58% drop in the main cryptocurrency is the largest since the third quarter of 2011, when the bitcoin it was still in its infancy, according to data compiled by Bloomberg.

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 spread and ultra-low interest rates spurred risk-taking. . But the current bear market is highlighted by the amount of leverage cryptocurrencies that has been undone, and by the regulatory scrutiny being brought to bear on an asset class that many central banks now see as a threat to financial stability.

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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 succession of bad news is added to a reprimand to the spirit of the cryptocurrencies of rampant speculation and boundless innovation: a token that was meant to be pegged to the US dollar collapsed, almost instantly wiping out some $40 billion of market value. Various lenders cryptocurrencies they were forced to suspend withdrawals, leaving depositors to fend for themselves. And more recently, a major hedge fund was ordered to be liquidated. cryptocurrencies after you have built up unsustainable leverage to fuel your 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 farther to go, according to a note published Wednesday from strategists at JPMorgan Chase & Co., including Nikolaos Panigirtzoglou. They also mentioned venture capital funding that “continued at a healthy pace in May and June.”

“The bitcoin has had good success over the last dozen years in making cyclical lows every 90 weeksHe said Fundstrat technical strategist Mark Newton. “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.”

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Source: Elcomercio

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