Another painful month has come to pass for crypto asset investors.
The same could be said for more traditional investments during June. For instance, the S&P/ASX 200 Index (ASX: XJO) parted ways with roughly 600 points to finish the month 8.5% lower.
However, such a loss would almost look positive to those investing in crypto after such a challenging month.
Here's a closer look at the explosive month (and not in a good way) for crypto prices in June.
What went down?
If I were to take the above heading literally, I could almost say, "nearly everything". There's no skirting around the truth here, June was yet another steep leg down for the digital asset market.
It is no overstatement to say that 99% of the top 100 crypto assets by market cap — excluding stablecoins — finished in the red by the end of the month.
The important question to ask is: why? What exactly is nudging so many investors to part ways with their investment and apply more selling pressure?
In all likelihood, the biggest contributor to sustained selling pressure in June was the lingering effects of inflation. In the United States, the consumer price index increased by 8.6% year on year in May, above expectations and the highest on record since 1981.
As Tom Dunleavy of Messari.io states:
It's hard to worry about putting money into the markets when you are concerned with putting food on the table or paying your mortgage.
Rising prices for goods and services, paired with the anticipation of rising interest rates, have only tempered enthusiasm for crypto during June.
In turn, crypto prices fell off a cliff in June as investors continued to go more risk-off under the current macroeconomic conditions. Specifically, falls across some of the biggest digital assets include:
- Bitcoin (CRYPTO: BTC) down 38%
- Ethereum (CRYPTO: ETH) down 45%
- Cardano (CRYPTO: ADA) down 25%
- Solana (CRYPTO: SOL) down 27%
Who is buying crypto at these prices?
The reality is, for every seller there is a buyer. So, while there are plenty of people unloading their positions, there's an equal number of people on the opposite end of the transaction.
Possibly one of the most notable buyers, and self-proclaimed Bitcoin maximalists, is MicroStrategy CEO Michael Saylor. The famed original crypto-asset supporter took to Twitter on 29 June to let the public know MicroStrategy had purchased another 480 bitcoins for approximately US$10 million. This took the company's Bitcoin holdings to 129,699 bitcoins.
The overall crypto market cap now resides at US$868.8 billion. This marks an unceremonious tumble below the trillion banner. Although, as my colleague Bernd recently covered, some experts — including eToro's Simon Peters — consider the pullback to be within historic ranges.
