Bitcoin appears to be taking a welcome break for millions of investors.
The most popular cryptocurrency has regained some life: the price was at $19,735.89, up 4.4% in the last hour, according to data firm CoinGecko.
Bitcoin had fallen on June 18 to $17,677.43 before rebounding slightly to $18,290.75. The digital currency extended its recovery after billionaire and cryptocurrency evangelist Elon Musk tweeted that he was buying the Dogecoin meme coin.
“I will continue to support Dogecoin,” Musk wrote on June 19.
Musk’s tweet caused a real rally in the market, which saw the post by the world’s richest man as a sign of renewed confidence in cryptocurrencies while there is a lot of doubt about the future of many projects and companies.
Ether, the second cryptocurrency by market cap, rose 6.5% to $1,058.60 in the last hour. The Ethereum platform’s native token dropped to $881 the day before, the lowest since January 2021.
Ether and Bitcoin together account for just over 55% of the cryptocurrency market cap, which often changes according to its price. The cryptocurrency market as a whole gained 3.7% to $972 billion in the last hour.
In the last seven days, Bitcoin has lost 30.1% of its value and Ether 30.8%. But compared to its all-time high of $69,044.77 hit on Nov 10, Bitcoin is down 72.1%, while Ether is down 79.2% compared to its all-time high — $4,878.26 — set in same day.
The reasons for the crash are the same: Recession fears are driving investors to liquidate risky assets. Cryptocurrencies and technology groups are considered as such.
“Many people in the #crypto industry are saying this crash is a healthy shakeup,” wrote economist and cryptocurrency critic Peter Schiff on Twitter. “I agree that it is healthy, but not for cryptocurrency. This industry as we know it is dead, which is very healthy for the economy. Cryptocurrency probably has a future, but #Bitcoin will not be a part of it.”
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‘Terrible’ Cryptocurrency News Cycle
The cryptocurrency market is also rocked by several scandals.
The first is the sudden collapse of sister tokens UST and Luna, despite their founders promising their technology was solid and viable.
The second scandal is the June 12 decision by cryptocurrency lender Celsius Network to freeze withdrawals and other transactions from its platform. Since then, rumors have circulated about a potential insolvency of Celsius, which has not yet dispelled them.
Then, on June 17, cryptocurrency financial services firm Babel Finance said it was temporarily suspending withdrawals and redemptions in the latest blow to the cryptocurrency industry.
“Due to the current situation, Babel Finance is facing unusual liquidity pressures,” the company said in a statement. “We are in close communication with all related parties about the actions we are taking to better protect our customers.”
During this period, the statement continued, “redemptions and withdrawals of Babel Finance products will be temporarily suspended, and the resumption of normal service will be notified separately”.
Babel Finance describes itself as “one of the largest service providers for institutions in the cryptocurrency financial markets”.
Three Arrows Capital (3AC) confirmed rumors that it was having serious financial difficulties after its investments in projects like Luna turned to disaster.
“We are committed to working things out and finding an equitable solution for all of our constituents,” crypto hedge fund co-founder Kyle Davies told the Wall Street Journal.
“The news flow has been terrible for cryptocurrencies,” said Edward Moya, senior market analyst for the Americas at Oanda. cryptocurrency lending companies.”
Moya said Bitcoin fell “as risk appetite left Wall Street as investors became concerned about a much faster deterioration for the US economy.”
“Rising recession fears are crippling appetite for risky assets and this makes cryptocurrency traders remain cautious about buying bitcoin at these lows,” he said.