Why did BTC price fall below S$35,000?

• Bitcoin (BTC) price plunged to its lowest level since December 2020
• The world’s largest cryptocurrency has declined for 12 straight weeks
• Market capitalisation is now under US$1 trillion
• Crypto lending platform Celsius also paused withdrawals citing ‘extreme market conditions’
• Keen to trade Bitcoin? Open an account with us to long or short the crypto

BTC price: what’s the latest?

Bitcoin’s price has crashed over 10% to fall below US$25,000 (S$37,700).

This takes the asset’s market capitalisation under US$1 trillion for the first time in 18 months. BTC has now lost over 60% of its value over the last 7 months.

The world’s largest crypto asset has been falling for 12 straight weeks, as part of a wider market meltdown that saw many major digital coins tank in value, and some like Luna becoming worthless overnight.

The market was thought to have showed signs of bottoming out in late May (BTC price rebounded over US$30,000) but concerns over elevated consumer prices last week caused the asset to be sold off sharply.

BTC traded at US$23,580 as at 21:10 SGT on Monday (13 June 2022).

Earlier in the day, crypto lending platform Celsius also announced in a blog post that it would pause withdrawals and its swap and transfer products, due to ‘extreme market conditions’.

How do analysts see Bitcoin faring for the rest of 2022?

Despite current bearishness, many market players remain optimistic about BTC and other cryptos’ future, as the latest crash is not the worst that the market has seen.

‘In the past 9 years of operation of our company, we have seen multiple bear markets. We are not sure if the present dip is an indication of the bear market yet. Every bear market in the past has seen a recovery in 2-3 years and I don’t see any reason for this time to be different,’ Sathvik Vishwanath, Co-Founder and CEO, Unocoin, told FE Online last month.

Dileep Seinberg, founder and CEO of crypto fintech company MuffinPay also believes the crypto market will ‘recover’, stating that although the current ‘crypto winter might not be over soon’, major cryptos should be able to ‘come back stronger’ once they figure out how to build a sustainable future for crypto.

Meanwhile, observers like Robert Johnson, professor of finance at the Heider College of Business at Creighton University, warn that they ‘don’t expect crypto to come roaring back like it did in 2021’.

This is ‘because the tailwind of Federal Reserve monetary policy has actually become a headwind for the asset class’.

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