Bitcoin Fell in Mid-July and Analysts Are Wondering Why

Despite a solid rally in the week prior, mid-July saw bitcoin experience something of a dip in its price. It fell to about $30K even after several weeks of trading above $31,000 per unit.

Bitcoin Endured a Few Slips

The crypto market experienced a few nasty hits, such as non-fungible tokens (NFTs) being dramatically sold off. Many major collections saw their prices slouch as more and more individuals begin to question whether these assets are worth anything at all. Pixelated art has always been up in the air, but now the value is really starting to be seen as non-existent by some. Could this be the end of what was once a billion-dollar+ industry just three years ago?

But while bitcoin and many other assets experienced price slumps, not all the analysts out there are worried. There are several that seem to believe things are not only in good shape, but that slight corrections like these are healthy for the industry. Bendik Schei of K33 explained in a recent note:

After Bitcoin’s massive 14 percent gain last week, the market took a healthy hiatus.

Also, the bitcoin slump could potentially be contributed to the Federal Reserve again hiking borrowing costs following private payroll data showing things being much better than initially anticipated. Wall Street is now beginning to see bitcoin and many other assets in a whole new light according to Matt Maley, the chief marketing strategist at Miller Tabak + Co. He explained in a recent interview:

Higher rates are having an impact. The bulls were already disappointed that bitcoin couldn’t break out after the euphoria surrounding the BlackRock ETF filing. So, this recent jump in interest rates is throwing salt on the wound of those bulls.

Stephane Ouellette – chief executive of FRNT Financial Inc – also threw his two cents into the mix, commenting:

Any speculators will be less incentivized to move up the risk curve as capital is generally more expensive. That said, blockchain data tells a clear story of the dominant investor profile in BTC being a long-term holder, which tend to be less sensitive generally to macro factors.

One of the problems right now is we have several crypto firms suing other crypto firms, thus resulting in market turmoil and shakiness. Gemini Trust Co., for example, is suing Digital Currency Group Inc. and its chief executive Barry Silbert, claiming the company took part in “fraud and deception” after Gemini garnered hold of several frozen funds from the company.

Not Worth One’s Time or Money?

Michael Rosen – chief investment officer at Angeles Investments – said:

I have long believed that these private cryptocurrencies fall somewhere between a delusion, a fraud, and a scam. It’s somewhere in there. So, I have no idea why anyone is involved in these things.