Bitcoin falls below $ 19,000 again as pressure increases on crypto companies

Bitcoin falls below $ 19,000 again as pressure increases on crypto companies

The Bitcoin price remained under pressure in June when a number of factors including rising prices and a liquidity crisis in the crypto industry weighed on the world’s largest cryptocurrency.

Westend61 | Westend61 | Getty pictures

Bitcoin fell below $ 19,000 on Thursday as the world’s largest digital currency remains under pressure from macroeconomic concerns and a liquidity crisis among high-profile crypto companies.

Bitcoin was last traded 5.7% lower at $ 18,978.60, according to Coin Metrics. The digital currency is down around 58% this year alone and has fallen around 72% from its record high of $ 68,990.90 hit in November.

“Bitcoin continues to be under pressure as other assets are. The mix of high inflation, rising interest rates and recession is weighing on cryptocurrencies,” Yves Longchamp, head of research at digital asset-focused SEBA Bank, told CNBC via email.

Global stock markets are still under pressure, and the S&P 500 falls to end the worst first half of the year since 1970.

Bitcoin has been closely correlated with the movement of stock indices and especially the Nasdaq. Shares have been under pressure that has weighed on the price of bitcoin.

Read more about technology and crypto from CNBC Pro

Investors are also worried about violent inflation that is forcing global central banks to raise interest rates. It also raises fears of a recession in the United States and other countries.

Liquidity problems affect crypto companies

The cryptocurrency price crash has revealed the industry’s highly leveraged nature and caused a liquidity problem across companies.

Cryptocurrency hedge fund Three Arrows Capital fell into liquidation this week, a person with knowledge of the case told CNBC. The company had exposure to the now collapsed terraUSD algorithmic stablecoin and sister token luna. Three Arrows Capital, or 3AC as it is also known, also failed to meet a margin call from BlockFi.

See also  PPD Detective Joseph Taschetta is Officer of the Year, cracking crypto scams

A margin call is a situation where an investor must commit to more funds to avoid losses on a trade made with borrowed cash.

Meanwhile, the cryptocurrency exchange CoinFlex stopped withdrawals for customers last week citing “extreme market conditions.” CoinFlex CEO Mark Lamb also said longtime crypto investor Roger Ver owes the company $ 47 million. Ver denies that he owes change.

CoinFlex issues a new coin to cover the $ 47 million deficit. Lamb told CNBC in an interview on Wednesday that CoinFlex is in talks with several large funds that are interested in buying the token. He also said that withdrawals for customers would not resume on Thursday as planned.

“In this environment, pressure remains on bitcoin and other cryptocurrencies,” Longchamp said, given the uncertainty over whether the lending to the industry is over.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *