The value of Bitcoin plummeted this week below the $60,000 threshold, thereby sealing its worst monthly performance since June 2022. The world’s largest cryptocurrency closed a particularly bleak first half of the year, during which it shed 33% of its value since the beginning of the current year. This, while the broad S&P 500 index recorded a gain of more than 9% over the same period. According to the data, the currency was on track to finish the month of June alone with a decline of over 20%.
The digital currency has been on a continuous downward trend since it plummeted from its all–time high in early October, with selling pressures and forced liquidations echoing familiar patterns seen in the crashes of previous market cycles. At the same time, even though Bitcoin is currently about 52% away from its all–time high, market analysts note that the current trough has developed without the massive bankruptcies that characterized previous bear markets in the crypto industry.
Meanwhile, the digital asset holding giant 'Strateg' helped soothe some investor concerns on Monday. The company announced that it had raised more than $1 billion with the aim of increasing its cash reserves, rather than purchasing additional Bitcoin – What was perceived as a sign of reassurance regarding the company's liquidity and its ability to distribute dividends. Ed Engel, an analyst at Compass Point, commented on the move and said that crypto cycles historically end in a spectacular crash, and that the company had been marked as the leading candidate for the market "bears". Engel added that the current cycle was not accompanied by a significant insolvency related to leverage or fraud, and that most of the leverage that was eliminated remained confined within decentralized markets without spilling over into the broader crypto industry.
Alongside this, the market declines were exacerbated by fears over the possibility of an interest rate hike by the Federal Reserve, as well as by a contraction in liquidity if the central bank indeed chooses to tighten its monetary policy. Bloomberg data shows that Bitcoin spot exchange–traded funds (ETFs) trading in the US are on track to record their largest monthly negative cash flow since they were launched in January 2024; during the month of June alone, investors withdrew more than $4.1 billion out of the 13 funds operating in the market.
At this stage, experts estimate that the leading currency has not yet reached its bottom. David Grider of Finality Capital Partners estimated that the bottom for Bitcoin, and for most of the digital assets around it, will not arrive before September or October. According to him, a decline to levels of $40,000 or $45,000 would not be unreasonable in the current situation.