2023-06-01 05:51:00
Crypto rally is losing steam, causing bitcoin to record its worst month since crypto exchange FTX crashed in November last year.
The fall of regarding 7,6% in May was Bitcoin’s first monthly decline of 2023. An indicator of the Top 100 digital assets has declined by a similar magnitude.
The largest cryptocurrency rose a 84% from the turn of the year to mid-April, climbing briefly to US$31.000but since then progress has slowed to 64%. Declining liquidity and tight monetary policy have curbed enthusiasm for cryptocurrencies.
Cryptocurrency experts had seized on the collapse of regional US banks in March as validation of mistrust in the fiat currency, leading to gains in bitcoin, but that turned out to be temporary support as authorities stabilized the financial sector. .
“What really needs to be done to get another bitcoin and crypto asset buying spree is show real utility and development for the cryptocurrency curious to get into that ecosystem,” John Wu, president of Ava Labs Inc., said on Bloomberg Television.
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The bitcoin network has seen a flurry of activity this year involving meme cryptocurrencies and non-fungible tokens. That put pressure on bitcoin in early May by causing further congestion on the blockchain and transaction fees, which have since been reduced.
The performance of other assets
Assets like stocks, bonds and gold outperformed cryptocurrencies in the last four weeks. The rise of artificial intelligence was particularly strong, stealing the spotlight and spurring a rise of more than 10% in an index of AI-linked stocks.
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The operators are also evaluating the implications of the agreement on the United States debt limitwhich Congress seeks to approve before June 5, date on which the country might enter into default. If the deal is approved, it might trigger a spate of bond sales that sucks liquidity out of the markets.
“Liquidity impacts tend to be more visible over longer time frames,” said Caroline Mauron, co-founder of digital asset derivatives liquidity provider OrBit Markets. “The large Treasury issues that might follow the deal are unlikely to materially affect the bitcoin price anytime soon.”
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