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The largest bitcoin in the ongoing sell-off has lost over 35% of its value in the last month.
If we take a random price of $29681 on June 4, 2022 and compare it to the last traded price on Coindesk.com of $19124, we get a steep loss of more than 39 percent. According to reports, this is the largest monthly drop in 11 years. Furthermore, the drop from its peak price of around $69K is more than 70%.
Other altcoins have gained some traction as of 11:32 a.m. (IST), with the majority of the Top 20 cryptoassets as compiled by Coindesk trading in the green.
The highly uncertain global economic situation is currently weighing on crypto assets. This being said, an assessment of the impact of higher interest rates is being made, and there is also a looming threat of recession. In such a situation, there is currently no significant factor that is sufficient to support digital tokens.
Furthermore, it is believed that India's new tax structure for cryptos is unfavorable to the asset class. Budget 2022 included section 115BBH, which states that all gains from the transfer of VDAs are taxed at a rate of 30%. This is before any expense deductions or loss set-offs are taken into account. In addition, 194S has been introduced to deduct TDS at a rate of 1% on all VDA transfers. These provisions are effective as of the new FY23 (2022-23).
As a result, even if the person has no other source of income, this is a significantly higher tax levy on cryptos.
What is allowing the crypto bears to keep going? How do stakeholders see the current Bitcoin drop?
According to industry experts, cryptocurrency volatility is unsettling, and there will be bumps along the way. So, while the current market is extremely bearish, experts believe that cryptos will recover.
This is Bitcoin's second-worst monthly drop since its inception in 2009. The primary reasons attributed to such losses during the month are deteriorating macroeconomic conditions globally, looming inflationary fears, and systemic risk within the crypto space.
"The losses were caused by a variety of factors," says the chairman of crypto investment firm Centurion & Co, according to a Kitco report.
"Among these were monetary policies bordering on central banks' responses to rising inflation caused by COVID-19 and the ongoing Russo-Ukrainian war."
"From Terra's collapse to Three Arrows Capital's liquidation and unending layoffs, the bad trend in the crypto industry weighed down the price of bitcoin," he added, adding that he expected institutional investments "to pour into the asset" and result in "better price performance" in July.
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