Bitcoin started July below $20,000. On June 18, the cryptocurrency had lost nearly 9% of its value in a single day. An unprecedented fall since the end of 2020, which confirms for some the crisis affecting digital currencies.
Bitcoin is falling, its detractors are having a blast – iStock.com / blinow61
The “collapse” of cryptocurrencies
On June 18, Bitcoin, the most popular cryptocurrency, took a value below $18,600 at the end of the day on the east coast of the United States. This is its lowest value since December 13, 2020. On November 10, 2021, Bitcoin reached an all-time high of $68,991 and since then the digital currency has lost over 72% of its value. On June 18, Eteherum, the second most popular digital currency, lost nearly 10% of its value. The same week, stock markets plunged for fear that central banks, faced with record inflation, were too aggressive. The cryptocurrency crash wiped out tens of billions of dollars in assets within hours.
Bitcoin critics are having a blast
The vertiginous fall of cryptocurrencies – and more particularly of Bitcoin – last June only reinforced the arguments of their long-time detractors. Attending the general meeting of the Berkshire Hathaway holding company last April, businessman Warren Buffet once again declared the uselessness of Bitcoin, which “modifies nothing, produces nothing”. While Bitcoin is struggling to rise above the $20,000 mark, Bill Gates – who has repeatedly pointed out the volatility of digital currencies and their environmental “cost”, multiplies statements discrediting digital currencies. At the end of June, ECB President Christine Lagarde spoke during a hearing in Brussels of the desire to strengthen the regulations surrounding cryptocurrencies. During a hearing in Brussels, Christine Lagarde spoke of the desire to move towards new regulations for digital currencies. Currently, two texts aimed at regulating cryptocurrencies are under discussion in the European Parliament. A historical critic of digital currencies and their lack of regulation, Christine Lagarde declared during this hearing that “crypto-assets and decentralized finance have the potential to create a real risk for financial stability”.
Struggling lending platforms
If cryptocurrencies are in freefall, lending platforms are in big trouble. Celsius Network, the market’s leading platform, announced in mid-June that it was freezing withdrawals and transfers for its 1.7 million customers, without specifying when they would be able to access their funds again. In the process, Coinbase announced the layoff of 18% of its workforce. Last May, the Stablecoin Terra platform collapsed, losing tens of billions of dollars in a matter of hours.