Bitcoin is on track to have its worst quarter in more than a decade — Canva/file

Bitcoin set for worst quarterly drop in a decade

by Pakistan News
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Bitcoin is on track to have its worst quarter in more than a decade — Canva/file

Bitcoin is on track to have its worst quarter in more than a decade, as more hawkish central banks and a string of high-profile crypto meltdowns stoke investor fear, Bloomberg reported.

According to Bloomberg data, the 58% drop in the largest cryptocurrency is the biggest since the third quarter of 2011, when Bitcoin was still in its infancy.

The decade in between saw several booms and busts, with the market value of cryptocurrencies reaching a high of $3 trillion as they gained widespread adoption and ultra-low interest rates encouraged risk taking. However, the current bear market is notable for the amount of crypto leverage that has been unwound — as well as the regulatory scrutiny being heaped on an asset class that many central banks now regard as a threat to financial stability.

Bitcoin fell as much as 4.4% to $19,302 in London on Thursday morning, the lowest since June 19. More volatile altcoins fared worse, with Avalanche and Polygon dropping around 8%.

The constant barrage of bad news is a rebuke to the crypto ethos of unbridled speculation and free-wheeling innovation: A token that was supposed to be pegged to the US dollar collapsed, erasing roughly $40 billion in market value almost instantly. Several crypto lenders were forced to halt withdrawals, stranding depositors. Recently, a prominent cryptocurrency hedge fund was ordered to liquidate after amassing unsustainable leverage to fuel its bets.

Despite the doom and gloom, some analysts believe the bottom is near. JPMorgan Chase & Co. strategists including Nikolaos Panigirtzoglou said in a note published Wednesday that the deleveraging that has accelerated the rout in recent months may not have much further to run. They also mentioned venture capital funding, which “kept up at a healthy pace in May and June.”

“Over the last dozen years, Bitcoin has had good success at making cyclical lows every 90 weeks,” Fundstrat technical strategist Mark Newton said. According to this cycle composite, lows should be right around the corner, and one should be on the lookout in July, looking to buy weakness for a healthy rebound, just as sentiment appears to be reaching a bearish tipping point,” it stated.

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