In mid-June, bitcoin updated a local minimum at $17.6 thousand. The cryptocurrency fell by 74% from the historical maximum of $69 thousand, which was set in November 2021. The cryptocurrency is currently trading at around $19,000.
How about bitcoin?
RBC-Crypto experts spoke about the main factors that put pressure on the cryptocurrency market and suggested at what point bitcoin could return to growth.
Over the coming summer months, the bearish trend will dominate, Roman Nekrasov, co-founder of the ENCRY Foundation, is sure. He explained that the tightening of the monetary policy of the US Federal Reserve and problems with crypto-lending platforms, which are faced with financial instability, negatively affect not only the bitcoin rate, but the entire market.
According to the expert, in the next month, bitcoin may drop to $15,000, and ether to $800. Next, Nekrasov expects a rebound in cryptocurrency rates.
“Judging by the order books, those who are waiting for the opportunity to increase their positions in cryptocurrency will immediately buy out $15,000 of bitcoin,” the specialist says.
A more negative scenario is expected by Bitnalog CEO Dmitry Machikhin. He predicted the collapse of the bitcoin rate to $10 thousand and below over the next 8-12 months, the price of Ethereum in this case will collapse to $250-400.”
“At the moment, the market is most hindered by the policy of the US Federal Reserve to combat inflation. As soon as this factor loses its pressure on the market, cryptocurrencies will be the first to return to growth,” Machikhin believes.
Nekrasov added that the duration of the current recession largely depends on inflationary risks and macroeconomic factors, the ability of the US Federal Reserve to contain inflation. Also, market participants are concerned about the possible tightening of regulation of stablecoins in the United States.
The dynamics of the crypto market now largely depends on the situation with cryptocurrency funds, says a representative of the exmo.me crypto exchange. He explained that Three Arows Capital has raised funds from all major lenders, including BlockFi, Genesis, Nexo, Celsius and others.
The total assets of the fund amounted to $18 billion, of which $9 billion was liquid. Given that the main investments of the fund were in bitcoin, which today fell by more than 70%, as well as projects such as Avalanche, Polkadot and Ethereum, which fell by 60%. %, 40% and 47%, respectively, then the value of the fund’s assets today is no more than $2.5 billion, the specialist believes.
According to him, the fund’s creditors manage amounts of $10-20 billion, of which only 5% is their own capital. This means that the write-off of loans issued by the fund will seriously undermine their financial stability. Lenders will repay loans issued to other market participants ahead of schedule (which is $30-40 billion), an exmo.me representative is sure.
“Such a volume of returns will provoke sales – both in the cryptocurrency market and in the stock market. Borrowers will have to sell assets to recover funds. Such large buyers are unlikely to be found on the market, which means we will see a new round of falling down, both for bitcoin and all the altcoins that they have in their portfolio,” the expert says.
He believes that the price of bitcoin will again drop to $17.6 thousand, after which it will go to the $13-15 thousand zone.”
The resumption of the bull cycle is unlikely before 2023, the co-founder of the ENCRY Foundation emphasized. In his opinion, the market may return to growth in the second half of 2023 on the eve of the next halving in the bitcoin network.
“The main growth will traditionally take place in the period of 12-18 months after the halving, that is, the second half of 2024 and the beginning of 2025,” the expert concluded.