Bitcoin could suffer its worst quarterly loss for more than a decade.
According to CryptoCompare data, the world’s most valuable cryptocurrency lost 58% in the second quarter 2022. According to CoinDesk data, Bitcoin was trading at $18,000 on Thursday after falling from $45,524 at its beginning and closing at $45,524 by the end of the quarter.
This is bitcoin’s worst quarter since 2011, when it lost 68.1%.
Bitcoin fell 39.8% in June, and is currently on pace to be the worst month since 2010, when it was first made available on exchanges. Coin Metrics data indicates.
According to Coin Metrics data, ether has dropped 69.3% in its second quarter. It is now on track to record its worst quarter since its inception in 2015.
Due to rampant inflation, cryptocurrency prices are under severe pressure. This has led central banks all over the world to raise interest rate and a sell-off of risk assets such as stocks and digital currencies.
The price crash has also revealed problems with several cryptocurrency projects and companies, especially those in the lending sector and high-leverage firms.
During the quarter, a number of highly publicized issues were brought to our attention.
This latest downturn has been described as a new “crypto winter” and has had a significant impact on growth and hiring at companies. Coinbase and BlockFi have announced plans to layoff staff.
Jacob Joseph, a research analyst at CryptoCompare notes that bitcoin dropped from a peak price of $19,871 during the fourth quarter 2017 to a low price of $3,170 during the fourth quarter 2018, resulting in a drawdown 8%.
Joseph stated that a similar drop of 82.2% was observed in 2014, when bitcoin dropped from a high point of $1,239 during the fourth quarter 2013 to a low point of $221 during the second quarter 2015.
Joseph stated to CNBC that this suggests that there could be a further drawdown period, if current macroeconomic conditions remain poor.
Others have also expressed their bearishness. Guggenheim Chief Investor Officer Scott Minerd, stated that bitcoin could fall to $8,000 in May. The cryptocurrency was trading at $30,000 at the time, which represents a 70% drop.