June was tough for crypto markets.
Even though bitcoin (BTC) ended the day 3% higher, last month, the largest cryptocurrency by market cap saw its biggest monthly price drop since 2011, 37.3%. Ether (ETH) was down 45% last month.
The declines resulted largely from a range of macroeconomic problems that has made traders risk-averse.
"This was one of the worst quarters on record pretty much everywhere across the equity market, across the bond market, across a lot of different places," Jeff Dorman, chief investment officer at the digital-asset manager Arca Funds, told CoinDesk.
With inflation still running at a 40-year high, and because of uncertainty caused by supply-chain disruptions and Russia's invasion of Ukraine, investors across all markets are fearful, and rightfully so.
The GDPNow gauge, a popular tracker from the Atlanta Fed, showed Thursday that real gross domestic product (GDP) declined by 1% in the second quarter, which would be the second consecutive month that the U.S. economy saw negative growth, indicating that we already might be in a recession.
But it's not all outside factors that affected the crypto market. Crypto itself suffered big shocks last month, causing declines that outpaced even major stock indexes, which continued to shed value.
Two weeks ago, Celsius's CEL token fell in value by over 50% after announcing it was halting withdrawals, although it regained some ground by month's end to finish down only 24%.
CoinFLEX, a crypto exchange focused on derivatives trading, also paused withdrawals. Its FLEX token declined over 65% in 24 hours.
"The story should be about the [decentralized finance] platforms that have worked in service to their customers admirably and without issue, while their [centralized finance] counterparts like Celsius have blown up," Dorman said.
A number of analysts believe bitcoin will break below the roughly $18,000-$21,000 support it held throughout June.
"A successful retest appears likely at this time and could set the base for a gradual recovery spread over a few months," BitBull CEO Joe DiPasquale wrote to CoinDesk. "A breakdown from this range could see bitcoin trading between $13,000 to $15,000 and could send the market into a spiral that may require a longer period of time for recovery."
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