On June 18th, Bitcoin dipped to $17,592, almost a quarter of its valuation in November 2021. The world’s second most popular cryptocurrency, Ethereum, whose valuation crossed $4,500 last year, struggled to stay above $1,000 over the weekend, CNN had reported.
Long-term Bitcoin investors also hit
Citing a report from blockchain analytics firm, Glassnode, Vice said that about 555,000 Bitcoin were traded recently, in the price range between $18,000 – $23,000. This also included holdings from long-term investors, who had probably been holding on to their cryptocurrencies but decided to now sell them, fearing a further dip in the currency’s valuation.
Crypto exchanges see red, and so do crypto miners
With cryptocurrency prices finding new lows every week, crypto exchanges have begun to feel the pinch. Crypto exchanges have already announced layoffs, while other crypto companies face liquidity crunches and even the risk of insolvency. Cryptolenders such as Voyager Digital and BlockFi have secured credit lines to keep themselves afloat, Vice reported. Still, some may not see the other side of this crypto winter that is setting in.
Crypto miners should ideally be insulated from the trading aspect of cryptocurrencies. However, companies set up for mining Bitcoin have seen a steep decline in their stock prices over the last month, the Financial Times has reported.
A drop in Bitcoin prices, coupled with an increase in energy prices, has forced mining companies’ machines offline to minimize their losses. This has been measured in a 10 percent drop in hash rate, the computational power being used to process blockchain transactions, since the beginning of the month. The impact of this decision has already shown in stock prices that have tanked by around 40 percent during the same period.
If the crypto markets do not show signs of recovery, we might also see takeovers and acquisitions in this space, as many companies have used debts to fuel their growth, and now lenders will look to consolidate their losses, Vice said in its report.