Bitcoin falls below $25,000 after a three-month hiatus

The rate of the most popular digital currency, bitcoin, after a three-month break, fell below the level of $25,000. Since the beginning of the month, its rate has decreased by 7%. However, other leading digital currencies lost 12-30% in price, which led to an increase in the share of bitcoin to record levels in two years. Experts attribute the stronger drop in the value of altcoins to the pressure that the US Securities and Exchange Commission (SEC) has begun to exert on the industry. Under the current conditions, it is possible that the price of bitcoin will depreciate up to $20,000.

According to Coinmarketcap, on June 15, the bitcoin rate fell to $24.8 thousand, the lowest value since March 16. This is 1.3% lower than the closing values ​​of the previous day. By 18:00, the rate remained below the level of $25,000. The steady decline in the rate of the leading cryptocurrency continues for the second week in a row, during which time it has lost more than 7%.

However, other cryptocurrencies showed a stronger decline in quotes. A three-month low was updated on Thursday by the second most popular digital currency, ether, whose exchange rate fell to $1.62 thousand. At the beginning of the week, BNB quotes reached a minimum since July 2022, Cardano quotes – a minimum since January 2021. Even with the subsequent rebound, they remained near the lows of this year. Since the beginning of the month, Ethereum has lost 12% in price, BNB – 22%, Cardano – 30%.

Due to the stronger fall in altcoin prices, bitcoin’s share of the cryptocurrency market has grown by more than 1 percentage point since the beginning of the month, to 47.6%, and reached a maximum since July 2021.

“When the market is calm and there is a stable uptrend, the share of bitcoin decreases as investors become more risk-averse. Altcoins, due to their low capitalization and, accordingly, higher volatility, can grow much stronger. The situation is mirrored in the “bear” market – alts are sold in the first place,” notes Vladislav Antonov, financial analyst at BitRiver.

At the same time, in recent days, cryptocurrencies have fallen into an almost perfect storm, says Sergey Mendeleev, head of InDeFi Smart Bank. And the reason for this is the systematically deteriorating news background. On Wednesday the Fed let kept rate at the level of 5.5-5.75%, but the situation was overshadowed by hints of the possibility of a further increase in the rate. “The prospect of its growth reduces the attractiveness of cryptocurrencies as a high-risk asset class for investors,” says Alexander Mamasidikov, CEO and co-founder of Mineplex Digital Banking.

The Fed’s tough statements have landed on already fertile ground for a move away from digital currencies. In May, the US Securities and Exchange Commission (SEC) launched a “crusade” on the crypto industry. Since the end of the month, the regulator managed to blacklist over 60 cryptocurrencies with signs of securities. “Now investors have no confidence that the assets in their portfolios will not be qualified as securities, which promises problems for both the founders of these blockchain projects and the holders of these assets,” says Roman Nekrasov, co-founder of the ENCRY Foundation. In early June, the SEC sued the Binance and Coinbase exchanges, which actively trade such crypto assets. Under such conditions, according to Sergei Mendeleev, the top exchanges were forced to delist them. As a result, investors are actively moving either to other assets or to bitcoin, keeping its rate from a deeper decline.

Further behavior of cryptocurrency quotes will depend on further steps taken by the SEC and the Fed, however, their position in the market is not expected to soften.

According to Mr. Nekrasov, the level of $20,000 could become the lower limit for bitcoin. “It is more likely that the rate will remain in the range of $22–27,000,” he estimates. According to Sergey Mendeleev, the market will be supported by the approach of halving (the process of reducing the speed of generating new units of cryptocurrency, expected at the beginning of 2024), which should traditionally contribute to the bull market.

Vitaly Gaidaev