Nataxis with the latest on Bitcoin:

Bitcoin: adjustment nearly over? Since mid-May, Bitcoin and crypto assets have been in crisis. After a high at $63,500, Bitcoin collapsed to almost $30,000, Ethereum went from a high of $4,400 to a low of $2,000. The capitalisation of crypto assets has fallen from a high of $2 tr nearly January to $1.5trn early June. In this environment, Bitcoin struggled in particular. Its weight in the total capitalisation of crypto assets fell from 69% at the beginning of January to 41% at the beginning of June, to the benefit of Ethereum in particular, boosted by the upcoming migration to ETH2.0.

The crypto assets’ fall stems from their structural weaknesses, namely their negative environmental impact since energy intensive and the lack of a regulatory framework. In this respect, the correction started when Elon Musk said he would no longer accept Bitcoin as a means of payment due to its negative environmental impact. Similarly, power outages in parts of China, where a large number of mining facilities were located, led to a drop in the network’s hash rate, in turn to Bitcoin’s decline. This led the Chinese authorities to ban financial institutions in the country from providing any services related to Bitcoin and other crypto-currencies.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.