THE FIGURE OF THE WEEK. The cryptocurrency crash is growing: the famous cryptocurrency has lost a third of its value in just one week.
at €1 the 1st month
The price of bitcoin fell on Wednesday morning June 15 to $20,183, a drop of 33% in one week and a decline of 70% compared to at its peak of 68,925 dollars reached on November 9, 2021. The valuation of all the thousands of cryptocurrencies identified has, for its part, been divided by more than three in less than seven months, from 3,000 billion to 900 billion dollars.
The crypto-asset market is a victim of the hike in interest rates decided by the American Federal Reserve and the European Central Bank to fight against inflation, thus ending a long period of free money which had been favorable to speculative investments . It is also suffering from a wave of general mistrust of this decentralized and unregulated finance, a mistrust heightened by the collapse a month ago of the stablecoin TerraUSD (UST), which had lost 99.8% of its value in a few hours. In this context of crash and in the face of massive sales movements, the Celsius Network cryptocurrency lending platform was forced to announce the freezing of withdrawals earlier this week, a decision which accentuated the feeling of panic and heightened suspicion which weighs on the sincerity of the accounts and the financial solidity of many players in the sector.
Beyond the denunciation of the lack of transparency of the cryptocurrency market, the leaders of the central banks had recently warned against the highly risky nature of these investments, the governor of the Banque de France, François Villeroy de Galhau, not hesitating not to compare the bitcoin craze to that observed for tulip bulbs in the Netherlands in the 17th century, the first great speculative bubble in modern financial history. “My very humble opinion is that cryptoassets are worthless,” European Central Bank President Christine Lagarde said in late May. They are not based on anything, they are not attached to any underlying asset that could provide security.
According to a study carried out by KPMG on behalf of Adan (Association for the Development of Digital Assets), 8% of French people held cryptocurrencies at the start of 2022, i.e. a higher share than that of 6.7% owning live stock, while 30% of respondents were considering buying one.