Due to the panic in the crypto market, June 13, 2022 has already been called Bloody Monday. A large exchange platform froze the withdrawal of Bitcoin, another stablecoin lost its peg to the US dollar. At the moment, cryptographic projects are in danger of bankruptcy. The current market situation causes unrest among crypto enthusiasts and ordinary participants in the global exchange. It is assumed that the real cause for alarm is yet to come.
The situation in the cryptocurrency market
If we take into account the November maximum, then BTK quotes fell by 60%. Ethereum sank by 70%, the fall continues. As usual, altcoins are taking on the bearish sentiment of the crypto market leaders. Institutional players and crypto traders should be careful when choosing financial assets. Since the beginning of the year, Ethereum funds have been losing large sums. The outflow of investments amounted to more than 300 million dollars. Bitcoin funds, by contrast, are posting a $450 million positive.
Due to the panic in the world markets, many cryptographic projects faced the loss of investments. At this time, popular crypto exchanges record record activity. On June 12, the digital project Celsius suspended payments, and the next day, the Binance exchange platform banned the withdrawal of BTC. All these events contributed to the growth of market panic.
Losses of cryptographic projects
Negative moods prevail in the cryptocurrency market, digital coins are losing their positions:
- Due to the unstable situation, the CEL token lost more than 50% during the day, bitcoin fell by 18 percentage points.
- The young stablecoin USDD has a low level of capitalization. It appeared on world markets in May 2022. At the moment, this token is facing a liquidity crisis. It has lost its peg to the US dollar. On the KuCoin exchange, the quote fell to 91 cents and did not recover. Thus, there is a decline of another digital currency.
Major holder MicroStrategy also has serious problems. For the past three years, the company has been buying BTC, trying to keep up with the growth in the cost of the first cryptocurrency. She started with $12,000. At the moment, the assets of this corporation total more than 130,000 bitcoins, with a total loss of $ 1 billion. The last purchases were made on credit, and therefore the project is obliged to increase the security deposit in the bank.
The fall of the cryptographic market is a kind of stress test that screens out weak projects. If a company is focused on making momentary profits, then it is highly likely to lose its capitalization. Public mining projects have moved from hoarding to selling BTK. They suffer from a shortage of money, faced with the need to cover operating expenses. A series of mergers and acquisitions in the field of cryptocurrencies is expected in the near future.
The fall of the crypto market is predictable! Basic prerequisites
The decline in the digital currency market is not news to most large corporations. At the end of last year, it became known about the tightening of the monetary policy of the US Federal Reserve. It was at this time that Jerome Powell stopped seeing high inflation as a temporary problem. The aggressive policy of the regulator led to the decline of risky assets. Following the digital currencies, the stock exchanges also collapsed.
It is worth remembering that since 2020 there has been a change in investment forces. Now the main role in cryptographic exchanges is given to institutional players. These are corporations with capital investments over $1 million. Most businesses are run by citizens of the United States. In this regard, a completely understandable pattern arises: the increase in Fed interest rates has a negative impact on the digital asset market.
A new meeting of the Federal Reserve will be held soon. It is assumed that following the results of this meeting, the key rate will be increased. Most international analysts expect growth of 0.5%. The acceleration of inflationary processes can induce the American regulator to take bolder actions. At the moment, the United States is experiencing record high inflation. If the key rate rises, then the pressure on Bitcoin and other cryptocurrencies will increase. When making an analytical forecast, a trader should pay special attention to macroeconomic factors.