Bitcoin is rarely thought of as a store of value. It is more of a digital currency, which is generally used as a medium of exchange. However, it has been much more than that. Bitcoin has been the world’s most exciting and controversial financial asset in recent years. The coin has seen spectacular growth. It’s price has gone from $1,000 at the beginning of 2017 to over $20,000 at the end, with some predicting a price of $50,000 by the end of 2018.
The number of Bitcoin transactions has fallen in the last month to a level not seen since November, where it dropped below $9,000 – after surging to a peak of $20,000 in December. In total, Bitcoin has lost more than 70 percent of its value since its peak of $20,000, which means it is now worth just over $6,000. The market’s collapse has caused one of the oldest exchanges, Coinbase, to report losses of $1.7 billion in a series of ‘stress tests’.
Bitcoin has been through a lot since the start of this year. And the cryptocurrency’s price action suggests that it’s about to go through more of a wild ride. As of this writing, bitcoin is down over 35% from its intra-year January high. That’s the biggest one-month decline since the market saw a similar decline in the traditional stock market in the first quarter of 2014.
Bitcoin is on track to record its worst quarter since the downward trend began in 2018.
The current quarter was also the second worst quarter in BTC’s nearly eight-year history since early 2014.
According to cryptocurrency data aggregator Skew, bitcoin is now down nearly 46% for the quarter, its weakest quarter since the first quarter of 2018 – when it lost about 50% of its value in just three months amid a drop from 2017 highs.
#bitcoin up 10% year-on-year, but heading for worst quarter since Q1 2018 pic.twitter.com/z3PpsAlIJK
– skew (@skewdotcom) 22. June 2023
Since the beginning of 2019, the second quarter of 2023 is only the fourth quarter that bitcoin’s value has fallen: In the first quarter of 2023, the price of BTC fell by 10.6%, in the fourth quarter of 2019 by 13.6% and in the third quarter of 2019 by 21.5%.
Big boys unload BTC
According to CoinShares’ weekly digital asset fund movements report for the 21st. In June, institutional investors continued to reduce their positions in bitcoin for the sixth consecutive week, with investment products tracking BTC losing $89 million in seven days.
Overall, crypto investment products saw outflows for the third week in a row, with investors pulling $79 million from the sector last week. However, CoinShares notes that multi-asset inflows reached $10 million, followed by Polkadot with $1.2 million and Ripple with $800,000.
Institutions are not the only ones scaling back their presence in bitcoin: According to string analysis provider Glassnode, OTC markets and miners are also losing their coins.
According to Glassnode, BTC shares on OTC exchanges have fallen to their lowest level since March 2023, while miners have also sold off in recent weeks due to Chinese restrictions on bitcoin mining.
#Bitcoin miners raised their wages in June as the mining industry undergoes the largest migration in history.
Nevertheless, $BTC holdings on OTC exchanges reached a new local low, last seen in March 2023.
Read our analysis herehttp://t.co/dRbQgKkwfh pic.twitter.com/9MDXQfVB4l
– glassnode (@glassnode) 23. June 2023
But not everyone capitulates: Anthony Pompliano, a popular Bitcoin podcaster, tweeted to his nearly 1 million followers that he collects Bitcoins by averaging their dollar value no matter what.
Related: Bitcoin drops below $30,000 and hits 6-month low Look forward to the next price support levels
Mr. Pomp calls himself a terrible trader who is guaranteed to lose and admits that he has no idea what the price of bitcoin will do in the short term, so he emphasizes his long-term outlook for BTC.
4/ The average-dollar value strategy is based on the idea that market timing is more important than market timing.
This is what has historically happened to bitcoin. Over the past decade, the annual growth rate of these assets has exceeded 100%.
– Pomp (@APompliano) 22. June 2023
Glassnode also notes that long-term holders – Bitcoin addresses that historically have not sold the coins they have accumulated – have increased their holdings significantly since Bitcoin began to pull back from its historic highs in April.
If you’re scared, think about what long-term #Bitcoin holders are doing right now. Don’t let it get you down, think long term. https://t.co/koCh7pfGf9 pic.twitter.com/bAba8DUWo2
– Jan & Jana (@Negentropic_) 22. June 2023Bitcoin continued to drop in the last week of July, putting it on track for its worst quarter since the start of 2018. This is surely the primes candidate for the worst quarter for bitcoin in the last five years, and it also marks the second quickest time to fall below $6,000 in the last two years. Bitcoin has also become one of the most volatile assets in the world, as the cryptocurrency has now fallen more than 70% in just one year.. Read more about next crypto bear market and let us know what you think.