Bitcoin Posts Worst Monthly Drop in Four Years, Could Fall to $40,000
Bitcoin's value fell below $60,000 this week, marking its worst monthly performance since June 2022. The cryptocurrency has lost 33% of its value in the first half of 2024, while the S&P 500 index rose over 9% during the same period. June alone saw Bitcoin decline by more than 20%, continuing a downward trend since its all-time high in early October 2023. Despite being about 52% below its peak, analysts note the current slump lacks the massive bankruptcies seen in previous crypto bear markets.
Digital asset firm Strategic Holdings helped ease investor concerns by raising over $1 billion to boost cash reserves instead of buying more Bitcoin, signaling liquidity strength and dividend capability. Analyst Ed Engle from Compass Point highlighted that unlike past cycles, this downturn has not involved significant defaults linked to leverage or fraud, with most deleveraging contained within decentralized markets.
The market decline intensified amid fears of a Federal Reserve interest rate hike and tightening monetary policy, which could reduce liquidity. Bloomberg data shows U.S.-traded Bitcoin ETFs are on track for their largest monthly outflows since their January 2024 launch, with investors withdrawing over $4.1 billion from 13 funds in June alone. Experts believe Bitcoin has not yet hit its bottom; David Grider of Finality Capital Partners predicts the low point may come in September or October, with prices potentially dropping to $40,000 to $45,000 under current conditions.
