Bitcoin, the most well-known cryptocurrency on the market, continues in free fall, and this Wednesday it falls more than 4% in what may be its ninth consecutive session down, a period in which it has lost 33% of its value.
Experts explain that these falls are due to the tightening of monetary policies by central banks to control high inflation and the news from various companies in the sector, which are taking measures to avoid losses.
Last Monday the cryptocurrency trading and lending platform Celsius Network suspended all withdrawals, exchanges and transfers between the accounts as a result of “extreme conditions” in the market.
In this line, The popular cryptocurrency exchange company Coinbase announced yesterday that it will reduce 18% of its workforce with the dismissal of 1,100 workers.
According to data from Bloomberg consulted by Efe, bitcoin moderates its losses this morning and falls 4.11% to $21,063, the lowest since December 2020. In the previous session, the fall was 5.36%.
Bitcoin has registered a downward trend since the beginning of the year that was accentuated in May with the collapse of the “stablecoin” (stable cryptocurrency) terraUSD and the cryptocurrency luna.
After these losses, bitcoin remained stagnant for almost a month at around $30,000 until registering further declines that began last Tuesday, June 7.
The expert analyst in crypto assets of the multi-asset investment platform eToro, Simon Peters, considers that the loss of value that cryptocurrencies have experienced in recent days is due to the US inflation data, which rose in May above than expected and reached 8.6%.
Experts explain that the rate hikes by central banks have influenced the price of cryptocurrencies.
Bitcoin has fallen 47% since the last Federal Reserve (Fed) rate hike on May 4.
“Rising interest rates and bond yields have weighed on US equity market valuations and crypto assets”points out Peters, who argues that cryptocurrencies have behaved in recent months like traditional stock markets and their valuations have been affected by this rise.
XTB analyst Darío García believes that if the Fed were to announce an interest rate hike of 75 basis points this afternoon, cryptocurrencies would suffer even greater losses.
“Equity markets will also be affected, and specifically the technology index,” points.
Likewise, it points out that in the collapse of bitcoin, the decision of Celsius Network to suspend all transactions between clients and the withdrawal of capital from its platform has weighed, which caused this cryptocurrency to lose 15%.
The cryptocurrency exchange platform Binance temporarily suspended the withdrawal of money to update its systems, which added to Coinbase’s decision to cut its staff has negatively affected the market and “has generated panic among investors” Garcia explains.
Bit2Me spokesman Javier Pastor believes that the market has entered a “panic” and explains that users are withdrawing their funds from the platforms to obtain liquidity.
The value of bitcoin is down almost 55% in the year and 69% from the all-time high it reached last November, when it touched $69,000.