Bitcoin experiences worst month in history as over $400B is wiped off crypto market in June Bitcoin experiences worst month in history as over $400B is wiped off crypto market in June
Crypto stakeholders are blaming the Fed's increase in interest rates for the crash of the crypto market.
2 min read
Updated: Jul. 1, 2022 at 6:02 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The crypto industry has experienced its worst month ever as over $400 billion was wiped off the market by the capitulation of digital assets in June.
#Bitcoin is about to close -40% in June
– the worst month ever! 🤨 pic.twitter.com/rQ2JckE7rF— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) June 30, 2022
Bitcoin (BTC) and Ethereum (ETH) were one of the worst-performing digital assets for the month, as they both lost an average of 40% of their values, respectively.
Bitcoin, Ethereum trade at new lows
As of June 1, 2022, BTC was trading for over $31,000, and its market cap was around $607 billion.
However, at the month’s end, the flagship crypto-asset value had dropped to $18,945, with its market cap at $361 billion. This massive decline means the asset is trading 71% away from its all-time high.
On the other hand, ETH started June at $1994, briefly capitulated to less than $1,000 before slightly recovering to $1098 -its value on June 30.
ETH is currently 78% below its all-time high, and its market cap fell from $220 billion at the start of June to the current $125 billion.
Meanwhile, this is the first time Bitcoin and Ethereum would be crashing below a previous cycle ATH.
Stakeholders blame Feds
Crypto stakeholders are blaming the Federal Reserve for the crash of the crypto industry.
FTX CEO Sam Bankman-Fried, in one of his interviews, said that the rising interest rate is the major reason for the crash in crypto prices.
He said,
The core driver of [the crypto downturn] has been the Fed. People with money are scared.
Another who shares SBF’s opinion is Pantera Capital’s boss, Dan Morehead. According to him, the Fed made two huge errors, and the cryptocurrency industry is paying for its mistakes.
Inflation hit record highs during June, forcing the Fed to increase interest rates significantly. Some analysts believe that further hikes are still possible, which could further affect investors’ spending ability.
Stablecoins hold strong
While Bitcoin and other cryptocurrencies were struggling to maintain their prices and smarting from the crash of the Terra ecosystem, fiat pegged stablecoins live true to their name.
According to data from CoinGecko, the dominance of stablecoins increased by 5% in the past month.
Binance USD (BUSD), USD Coin (USDC), Tether (USDT), and DAI saw their dominance increase to 64.5% of the space. These assets now account for more than 15% of the whole crypto industry’s market cap, up from 10% at the start of June.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,355.05
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Binance USD
$1.00163
BUSD is a stablecoin issued by Paxos in partnership with Binance..
Tether
$1.00108
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
USD Coin
$0.99991
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Dai
$0.99984
Dai (DAI) is a cryptocurrency token and operates on the Ethereum platform.
Pantera Capital
Pantera Capital is an investment firm focused exclusively on ventures, tokens, and projects related to blockchain tech, digital currency, and crypto assets..
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Dan Morehead is the founder of Pantera Capital Management LP, a leading investment firm focused on digital currencies and blockchain technology.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.