Bitcoin is trying to bounce back after the debacle that has registered its price so far this year. Risk appetite has returned to stocks on expectations that the pace of Federal Reserve rate hikes may slow and the shock wave reaches cryptocurrencies. From the minimum below $18,000 marked at the end of June, its price has recovered by 34% and has reached almost $25,000 this week, a sizeable recovery that in any case is far from being able to compensate for a fall in value close to 50 in the year %.
Cryptocurrency prices have generally collapsed following the rise in interest rates in the US, their rise in recent years has been fueled precisely by cheap money and the liquidity spurt injected by central banks, leading to a constant search for profitability at the expense of ever-larger acquisitions risks. With monetary stimulus withdrawn, the most volatile and risky assets have been the first to suffer, with cryptocurrencies taking a prominent place.
In fact, price declines in this market have caused liquidity problems for several trading platforms over the past few months, which are struggling to respond to refund requests from their clients. The most notorious example was that of the American platform Celsius Network, which in mid-June announced the suspension of transactions and withdrawals of funds from its customers, causing the Bitcoin price to drop by 15%. Just a month later he filed for bankruptcy.
Other companies in the industry such as Coinbase and Gemini announced staff cuts of 10% and 18% respectively, warning of the onset of winter for cryptocurrencies.
Coinbase this week reported a $1 billion loss in the second quarter and a 64% drop in revenue.
Despite the difficult environment for the industry, the slightly more optimistic tone in the financial markets as a whole is giving cryptocurrencies some breathing space. Bitcoin’s price, now at the $24,000 threshold, has managed to return to mid-June levels and its rise has boosted the prices of companies closely linked to its trading, such as the aforementioned Coinbase , Hive Blockchain, Silvergate or Bit Digital.
The cryptocurrency sector also got a notable boost this week with news that BlackRock, the world’s largest fund manager, is offering its large institutional clients to invest in Bitcoin. Despite the fact that it is an unregulated, volatile asset that has suffered a sharp fall in value, the manager ensures that these large clients maintain their interest in crypto assets.