Bitcoin (BTC) Was Down 45% in June, Notching Its Worst Month Ever

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KEY POINTS

  • The most valuable crypto -- Bitcoin (BTC) -- fell 45% in June, registering its largest decline in a single month since its creation. According to CoinMarketCap, the peak to valley for June was a high of $31,693 which fell as low as $17,708.
  • Macroeconomic conditions and a flight from riskier investments are the key downward drivers.


Macroeconomic drivers include record inflation levels, the Russian-Ukraine war, as well as a possible recession.

Late last week, several media outlets reported that Bitcoin (BTC) had its worst monthly close ever, logging a loss of 38%, but it appears to be worse than that for the flagship crypto. According to CoinMarketCap data, Bitcoin hit a high of $31,693 in June and slid to a low of $17,708 per coin, which represents a 45% drop for the bellwether digital currency.

Macroeconomic factors are weighing crypto down

There are a variety of major economic contributors that are driving down Bitcoin's value. For instance, we've seen more than 12 months straight of inflation in excess of 5% over the comparable months of the preceding year and a record 8.6% in June 2022 -- which is hitting consumers hard in the pocketbook.

To try and slow that inflation, the Fed followed through on its aggressive plan to increase short-term interest rates by 0.75% last month, and it may boost rates by the same amount this month too. Not to mention the tensions in eastern Europe between Russia and Ukraine, which continue to cause supply chain issues as well as limits on availability of crude oil, driving energy and gasoline prices higher.

Additionally, the Atlanta Fed tweeted last Thursday that a key indicator it uses to track broad economic trends shows that real gross domestic product declined by 1% for the second straight month. That could be an early signal that production was down for the entire second quarter. If so, it would mark two consecutive quarters of negative growth, which is the textbook definition of a recession.

All of these factors and uncertainty are combining to drive funds away from speculative investments such as cryptocurrencies and into safer investments such as bonds and annuities.

Is Bitcoin a buy?

At press time, BTC is trading down by 2.5% on the day and 6.3% for the week across cryptocurrency exchanges, priced below $19,500 per coin. Bitcoin has not been in this trading range since December 2020, and is currently down 71% from its all-time high of $68,789 price per coin set on Nov. 10, 2021.

This is not financial advice, and investors should always do their own research and be aware of how much they can afford to risk, but dollar-cost averaging now into a proven crypto asset such as Bitcoin could be a savvy move for certain investors. While Bitcoin may still fall further, it's currently well within the accumulation range for anyone looking to acquire a top-tier crypto.

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