Bitcoin saw one of the worst quarterly performances in all 11 years of its trading history. It lost more than 58% of its value in Q2 of 2022.
Such losses are only second to the 66% quarterly loss of Bitcoin in 2011 when Bitcoin fell from $15.40 cents to $5.14. The first quarter of 2022 was softer than Q2 when Bitcoin plunged from $45,000 to $20,000. In the last 24 hours, it has been down by 3.69% and is currently changing hands at $19,200 at the press time. Such price action is a cumulative product of drastic events. Like they include the Terra implosion and liquidity crisis faced by Celsius and 3AC.
Bitcoin Down, Headcount Down
Due to the mass global startup layoff, crypto is not different from the layoff spree. The market capitalizations are falling and liquidity issues among crypto protocols are increasing. This has led to many crypto projects cutting their headcount and shrinking operations. These involve Coinbase, Bitso, Crypto.com, Gemini, and BlockFi as well as Bitpanda.
Global financial markets are in distress too. Geopolitical instabilities, Federal Reserve’s rate hike, and racing inflation are forming the pressure.
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Though, it’s not all pessimistic in crypto. Some companies, like FTX and Kraken, have confirmed their plans to hire new talent.
Buy it, or Liquidate it
Meanwhile, the ‘buy the dip’ bandwagon welcomed Bitcoin stackers in the hood. Michael Saylor of Microstrategy and El Salvador’s President Nayib Bukele lead the tribe.
Early this week, Microstrategy announced a buy of 480 Bitcoins for approximately $20,817 per coin. Also, El Salvador announced that it bought 80 Bitcoins at $19,000 per coin.
Futures data on Coinglass also reported massive liquidation in crypto markets. With Bitcoin and Ethereum futures racking up $200 million in liquidations.
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Liquidation refers to a situation when an exchange closes a trader’s leveraged position. This happens to owe to the partial or total loss of the initial margin. This occurs when the trader is unable to meet the margin requirements for a leveraged trade.
On the last day of June, a downward move caused $76 million of long contracts to get liquidation. This led to the happening of Friday’s short squeeze.