- Bitcoin displayed the worst performance in the second quarter of 2022 in the last decade.
- Concerns about economic slowdowns are among the reasons Bitcoin dived deeper.
- Tesla sold more than half of its Bitcoin holdings.
The crypto market has been in turmoil in recent days. According to research from BanklessTimes, Bitcoin experienced its worst quarter in a decade. The popular crypto fell by 56.27%, exceeding its previous record of a loss of 40.37% in the first quarter of 2021.
BTC was trading at roughly $45,000 at the beginning of the quarter that concluded in June. This was a 35% decrease from its all-time high of $69,000. On June 19, BTC was $17,100, the lowest price in the previous 18 months.
Commenting on the report, the CEO of BanklessTimes said this: “Bitcoin performance is worrying. However, if the past informs the present, then it will surge. In 2011, the drop was at 85%, but later it went up. So, Bitcoin’s bad performance in Q2 might not be the end of the road. Historically, BTC has been volatile. So, the recent drop in price should not come as a surprise to investors. Nevertheless, monitoring the market and making informed investment decisions is important.”
Reasons for the Bitcoin Correction
During the quarter, the crypto market as a whole worked in an atmosphere characterized by excessive inflation. This was due to the Federal Reserve’s efforts to impose high-interest rates.
Besides, volatile assets such as Bitcoin have been severely hit as concerns about an economic slowdown have grown. BTC and the stock market have recorded a higher link, although the equity markets also feel the strain.
Tesla offsetting 75% possession of Bitcoin was significant. Some translated it to a condemnation of the coin by Elon Musk. Yet, Tesla holds that it liquidated its Bitcoin holdings to maximize the firm’s liquidity position. Furthermore, Musk emphasized that the recent sale of cryptos by Tesla is not a verdict on Bitcoin.
Also, with the collapse of the Terra (LUNA) ecosystem, the decline in the price of Bitcoin increased. The dispute was a contributing factor that led to Bitcoin dropping below a critical support level of $30,000.
Analysts have projected that the correction could continue to drop closer to $10,000. Currently, Bitcoin is trading at $22,984.40.
Effects of Bitcoin Meltdown
Due to volatility, most businesses involved with cryptos have adjusted their business strategies. For instance, organizations like Coinbase have resorted to layoffs and hiring freezes. Some, such as Vauld and Voyager Digital, have filed for bankruptcy, while others had to close down their operations entirely.
