Bitcoin falls below $19,000 again as pressure on crypto firms intensifies

The price of bitcoin remained under pressure in June as a number of factors, including rising rates and a liquidity crisis in the crypto industry, impacted the world’s largest cryptocurrency.

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bitcoin fell below $19,000 on Thursday as the world’s largest digital currency remains under pressure from macroeconomic concerns and a liquidity crunch among high-profile crypto companies.

Bitcoin last traded 5.7% lower at $18,978.60, according to Coin Metrics. This year alone, the digital currency is down about 58% and down about 72% from its all-time high of $68,990.90, which was reached in November.

“Bitcoin is still under pressure, as are other assets. The combination of high inflation, rising interest rates and a recession is putting pressure on cryptocurrencies,” Yves Longchamp, head of research at digital asset-focused SEBA Bank, told CNBC via email.

Global stock markets remain under pressure as the S&P 500 falls towards the end of its rise. worst first half since 1970.

Bitcoin is closely related to the movement of stock indices and, in particular, to Nasdaq. Shares came under pressure, which affected the price of bitcoin.

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Investors are also worried about runaway inflation, which is forcing global central banks to raise interest rates. It also raises recessionary fears in the US and elsewhere.

Liquidity problems hit crypto companies

The collapse in the price of cryptocurrencies exposed the highly leveraged nature of the industry and created a liquidity problem for companies.

Cryptocurrency hedge fund Three Arrows Capital went into liquidation a person with knowledge of the matter told CNBC this week. The company has been affected The algorithmic stablecoin terraUSD is currently crashing. and token sister Luna. Three Arrows Capital, also known as 3AC, was reportedly unable to meet a margin call from BlockFi.

A margin call is a situation in which an investor must allocate more funds to avoid losses on a leveraged trade.

Meanwhile, cryptocurrency exchange CoinFlex suspended withdrawals for clients last week, citing “extreme market conditions.” CoinFlex CEO Mark Lamb also said that longtime crypto investor Roger Ver owes the company $47 million. Ver denies that he owes money for the exchange.

CoinFlex is issuance of a new coin to make up for a $47 million shortfall. Lamb said in an interview with CNBC on Wednesday that CoinFlex is in talks with several large funds interested in buying the token. He also said that customer withdrawals will not resume on Thursday as planned.

“There is continued pressure on bitcoin and other crypto assets in this environment,” Longsham said, given the uncertainty over whether the industry’s deleveraging has ended.