Bitcoin (BTC) registered a new devaluation, falling below the US$60,000 mark this Friday (26). The cryptocurrency reached its lowest value in almost two years, projecting a month-end with an approximate reduction of 20%, which represents the worst performance observed since June 2022, a period marked by strong risk aversion in the digital asset sector.
The main cryptocurrencies on the market, generally linked to the behavior of bitcoin, follow this downward trend. While ether (ETH) and XRP (XRP) showed drops of 5.34% and around 4% respectively, solana (SOL) managed a slight appreciation on the day.
Experts identify five crucial elements that are contributing to the current downturn in bitcoin and, by extension, altcoins.
Bitcoin investment funds record significant outflows
Bitcoin index funds (ETFs) continue to see substantial capital withdrawals. Just on Thursday (25), these financial products based on cryptocurrency in the United States saw a net outflow of almost US$700 million, according to information from the SoSoValue platform.
These investment vehicles serve as the main access for institutional investors to the cryptoasset market. The recent outflows of resources are a clear indication of a more conservative stance on the part of large investors.
According to a report released by Glassnode this week, demand from large financial institutions has lost momentum, with US spot bitcoin ETFs continually reporting net capital outflows and reduced trading volumes.
Risk aversion in the technology sector puts pressure on bitcoin
Another relevant factor that puts pressure on the price of bitcoin is the intense wave of sales of shares in technology companies. This movement is particularly visible in the artificial intelligence segment.
Investors began to question whether the billion-dollar investments made in this sector are really compatible with the extremely high market valuations. There was also a significant profit taking after the significant appreciation in recent months.
As bitcoin is classified as a riskier asset, it tends to follow the performance of this sector, which has resulted in additional pressure on its price.
Rising inflation in the US raises concerns
The release of the Federal Reserve’s (Fed) preferred inflation index, the American central bank, last Thursday, also impacted the market. The core Price Index for Personal Consumption Expenditures (PCE) reached 4.1% in the annual comparison, the highest level in three years.
André Franco, CEO of Boost Research, explained that the reacceleration of inflation led the market to price in around an 80% probability of a rise in interest rates in December, resulting in an evaporation of risk appetite.
Higher interest rates generally have a negative impact on risky assets, including cryptocurrencies. This occurs because capital is attracted to alternatives considered safer and more profitable, such as US Treasury bonds.
Questions about Strategy’s business model
Strategy, recognized as the largest corporate bitcoin treasury globally, and one of the top buyers of the cryptocurrency in recent years, is under scrutiny. Its business model has been questioned amid the sharp drop in the value of bitcoin.
Analysis house CryptoQuant suggested that the company should pause its cryptocurrency acquisitions and focus on rebuilding its cash. According to the company, bitcoins acquired between 2024 and 2026 accumulate unrealized losses of around US$10.6 billion.
If Strategy slows down its purchases — or, in a more extreme scenario, is forced to sell part of its reserves — a significant source of demand could disappear from the market, intensifying pressure on the price of bitcoin.
Impact of expiry of options contracts
Another aspect that the market is following closely is the expiration of approximately US$10.6 billion in bitcoin options contracts this Friday, on Deribit, the largest platform for this type of derivative.
Options are financial instruments that give the investor the right, but not the obligation, to purchase or sell an asset for a predefined value by a specific date.
As these contracts come to an end today, many investors are likely to close out or adjust their positions, which could amplify the cryptocurrency’s short-term volatility.
Fluctuations of the main cryptocurrencies this Friday
See the prices of the main cryptocurrencies at 8:30 am:
- Bitcoin (BTC): -3.22%, quoted at US$59,301.11
- Ethereum (ETH): -5.34%, quoted at US$1,545.56
- BNB (BNB): -0.10%, quoted at US$563.73
- XRP (XRP): -4.21%, quoted at $1.02
- Solana (SOL): +0.65%, quoted at US$68.66
Other developments in the crypto market
Despite the recent devaluation of bitcoin, cryptocurrency trading volume in Brazil remains robust. In June, even before the end of the month, the amount transacted on the main Brazilian exchanges had already reached R$2.16 billion. This value exceeds the R$1.77 billion recorded in May and the R$1.52 billion in April. The expectation now is to verify whether June will exceed the volume of R$2.37 billion traded in March.
In a new initiative in Brazil, the Cardano Foundation, the entity behind the development of the ADA ecosystem, entered into a collaboration with Fiesp and SENAI-SP. The objective is to train professionals and expand the adoption of Cardano’s blockchain technology in the Brazilian industry, targeting applications such as traceability, certification of origin, data security and integration between companies.
On the international corporate scene, Brazilian Guilherme Nazar left his position as vice president of Binance for Latin America, a position he had held for two years. He now takes on a consultancy role at the world’s largest cryptocurrency brokerage. Daniel Acosta, who had served as Binance’s managing director for Colombia and Northern Latin America since 2022, was appointed to take over Nazar’s role. Before his time at the exchange, Acosta worked for a decade at Mastercard.