One year after the sharp decline ── Bitcoin and Ethereum, things that have not changed, things that have changed | CoinDesk JAPAN | Coin Desk Japan

Exactly one year ago, the cryptocurrency market fell sharply, starting with Bitcoin (BTC) and Ethereum (ETH) (BTC). What has happened since then, and what is different this time?

The current environment for crypto assets bears a lot of similarities to a year ago when prices plummeted. But there are also fundamental differences, and the market appears to be in better shape than it was a year ago. Let’s look back.

A Year Ago: Bitcoin’s Second Biggest Drop Since 2019

In 24 hours from June 13, 2022, crypto lending provider Celsius network will suspend customer withdrawals, and crypto hedge fund Three Arrows Capital: 3AC) indicated its own insolvency.

Bitcoin is down 15.4%, still the second biggest one-day drop since 2019.

Ethereum also fell 16.7%, its sixth-largest drop since 2020, rattling the market on fears of a growing impact.

Inflation fears were already widespread. On June 16, 2022, the US Federal Open Market Committee (FOMC) decided to raise the policy interest rate by 0.75%, the first significant increase in about 30 years.

never change

Just like last year, the fate of crypto assets seems to be intertwined with the fate of the two organizations. Last year it was Celsius and Three Arrows Capital. Binance and Coinbase this year.

Investors believe the fate of many crypto assets will be decided depending on the outcome of court cases and whether tokens are securities, commodities or something else. Many of the 19 crypto assets the SEC mentioned in the lawsuit have fallen more than 20% over the past week.

Binance and Coinbase already appear to be struggling financially after the SEC filing. Nonetheless, despite a surge in outflows from both companies last week, neither appears to be in trouble with its solvency. Binance is accused of commingling with customer funds, while Coinbase is accused of selling unregistered securities despite the SEC’s approval of the initial public offering.

Such legal action is seen as likely to unbalance the market.

changed

First, Bitcoin and Ethereum are up 19% and 44%, respectively, since June 13, 2022.

Relationships are also changing. Bitcoin and Ethereum do not reflect the movement of Coinbase shares, which fell 20% after the SEC lawsuit.

Bitcoin and Ethereum have been cut off from the movement of crypto companies. This was not the case last year.

Specifically, Bitcoin and Ethereum have seen their correlation with Coinbase stock drop by 30% and 17%, respectively, over the past year.

The SEC’s failure to include Bitcoin and Ethereum in its list of tokens deemed “securities” is the latest evidence that the two crypto assets should remain outside the SEC’s jurisdiction.

Macroeconomic factors outweigh the risks associated with the two cryptocurrency exchanges, with data like the US Consumer Price Index (CPI) released Wednesday arguably getting more attention than the SEC move.

US CPI rose 4% in May from a year earlier, just below the expected 4.1%. The US Federal Open Market Committee (FOMC) decided to suspend interest rate hikes for the first time in 11 meetings as inflation eased.

The dramatic events of last week, the events of a year ago, and the many events that have occurred in the last few months have led to the collapse of Bitcoin and Ethereum, even if they sometimes affect them. was never

Bitcoin and Ethereum seem to be growing more resilient in the face of many changes.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Bitcoin price change from June 1, 2022 (CoinDesk)
｜Original: Bitcoin, Ether Remain Resilient After Binance, Coinbase Suits, and Amid Long-Running Crypto Industry Turmoil