Bitcoin — and most other cryptos — had a rough weekend following Friday’s worse-than-expected Consumer Price Index (CPI) report that showed inflation at 8.6% in May. The crypto is at its lowest level since the end of 2020, as anxiety over a rapidly accelerating inflation is grappling traditional and crypto markets alike.
Bitcoin was at $23,675 on the morning of June 13, down 14% in the past 24 hours. The asset is also down 65.6% from its November 10, 2021 all-time-high of $69,044, according to CoinGecko.
“While cryptoassets have in the past not moved in step with traditional assets such as equities, in recent times the link between the two has grown ever closer. Now the clearest signal yet that cryptoassets such as Bitcoin and Ether are moving in lockstep with equities has flashed, as inflation worries have sent stocks and crypto tumbling,” Simon Peters, eToro market analyst, told GOBankingRates.
Peters said the reasons for this are varied, but much of it comes down to institutional holders which calibrate their risk assets in similar ways, be they tech stocks or bitcoin.
“U.S. monthly inflation dropped in April from 8.5% to 8.3% suggesting price rises had found a ‘top’ — but fresh highs of 8.6% last Friday have rattled equity and crypto markets alike,” he added.
Economist Peter Schiff, the so-called “Bitcoin Prophet of Doom,” took to Twitter on June 13, to reiterate his anti-Bitcoin stance, saying, “With Bitcoin dropping below key support at $25K and #Ethereum below 1300, the combined market cap of nearly 20K #cryptos has broken below $1 trillion, from a record-high of $3 trillion. That’s $2 trillion down, $1 trillion left to go. The last trillion will be the most painful.”
“As Bitcoin sinks below $24K, with no bottom in sight, @CNBC brings out its regular Bitcoin pumpers, like contributor @Scaramucci to keep its viewers from doing the right thing by jumping ship. I doubt CNBC invites a single Bitcoin bear on its air today to take the other side.”
Earlier in the day, Schiff had tweeted, “Why, back in 2008 #crypto didn’t exist and the world was still here? The world was here before crypto and it will be here after crypto. It’s just that #HODLers will be here without their money.”
In a series of tweets over the weekend, Schiff also warned that Bitcoin “HODLers” (holders) will soon have to sell to pay their bills, because of inflation.
“The need to sell Bitcoin to pay the bills will only get worse as the #recession deepens and many #HODLers lose their jobs, especially those working for soon to be bankrupt #blockchain companies. If circumstances change, long-term buyers without paychecks will be forced to sell,” he wrote.
CoinShares head of research James Butterfill wrote in a report on June 13 that negative sentiment continues to plague digital assets with $102 million in outflows last week.
“Digital asset investment products flows remain choppy in anticipation of hawkish monetary policy, with steady daily outflows last week,” he wrote.
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