BTC weighed down by hard macroeconomic factors, say experts

By Raffaele Redi
• Updated

BTC price falling is bringing down crypto-related stocks on the traditional markets

Golden Bitcoins with a cryptocurrency trading chart                                 
Bitcoin recorded its 10th red candle in 11 weeks of trading, according to Glassnode – Photo: Shutterstock

The sell-off wave hitting bitcoin (BTC) and all major cryptocurrencies is down to hard macroeconomic conditions, according to crypto specialists at Glassnode.

Data from CoinMarketCap shows BTC has plummeted by 24% over the past week. It was also down 6.5% over the last 24 hours and changing hands at raound $22,122 earlier today. BTC’s market cap fell to $421.8bn, while trading volume was at $66.1bn, 12% higher.

The pressure this has been causing is spreading throughout the sector with the operator of the Celsius (CEL) token, the decentralised finance (DeFi) platform Celsius Network, pausing all withdrawels, swaps and account transfers yesterday.

It comes as US inflation accelerated to its highest level in 40 years last week, hitting 8.6% in May. This triggered a massive sell-off on Treasury Notes and government bonds, which has frustrated the risk appetite for equities and dragged cryptocurrencies lower, explained Glassnode in its The Week On-Chain newsletter.

“Macro headwinds remain a large-scale driver, with the latest US Consumer Price Index (CPI) of 8.6% being above expectations and another 2-year to 10-year US Treasury Bond yield curve inversion occurring in the early hours on Monday,” reported Glassnode. “This has been met with a large rally in the [US Dollar Index] DXY, as Bitcoin closes with its 10th red candle in 11 weeks.”

BTC dragging crypto stocks down on the traditional market

The sharp decline in the price of BTC also prompted a sell-off wave on crypto-related stocks – stock in large US bitcoin miners’ plunging to less than the price of a package of cigarettes, while giant US exchange Coinbase announced it was going to reduce the size of its workforce by 18%. 

Gripped by increasing energy prices and the falling price of Bitcoin, miners have witnessed a 20% decline on the stock market over the past five days with Greenidge Generation Holdings’ price falling to $3 and Riot Blockchain plummeted to $4.65 at close yesterday, 13 June 2022.

In addition, the largest institutional BTC holder, MicroStrategy, has seen its stock fall from $240 on 7 June to $152.15 at close yesterday. In May it posted cumulative impairment losses of $1.071bn for its BTC treasury, with approximately 129,218 bitcoins accumulated as of 31 March 2022.

Stock in the company, which is run by CEO Michael Saylor, fell by 25% in the Monday 13 June trading session to $152.15.

Values are correct as of 12:30 BST (UTC +1).

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