Bitcoin (BTC-USD) is sinking again this morning and is trading slightly above $19,000 per coin. The coin’s value is now significantly below the psychologically important $20,0000-per-coin level, leading some to believe that Bitcoin may be dead.
The decline comes after multiple companies in the crypto space have experienced major financial problems amid the crypto crash in recent days.
Crypto Firms Are Experiencing Major Challenges
Three Arrows Capital, a hedge fund that specializes in crypto, is undergoing liquidation. Three Arrows, in turn, defaulted on a required payment for a loan that it had received from Voyager Digital (OTCMKTS:VYGVF).
Voyager said that its platform was still functioning normally, but its CEO, Stephen Ehrlich, indicated that it would have to take unspecified, new steps in order to “continue to meet customer liquidity demands.”
Meanwhile, Celsius, which specializes in lending money to crypto investors and enabling them to trade and send each other crypto, is exploring a potential bankruptcy filing. This comes after it announced on June 12 that it would prevent its customers from making any withdrawals from their accounts.
Bitcoin Price Predictions
Despite Bitcoin’s continued retreat, multiple crypto websites continue to be bullish on BTC’s long-term outlook.
- For example, Gov Capital’s 1-year forecast calls for the crypto to reach $48,600.
- WalletInvestor believes that the crypto’s value will jump to $37,800 in 12 months.
- DigitalCoinPrice expects its average value to be $27,800 in 2023.
The Bottom Line
The crash of cryptocurrencies conforms with my longtime thesis which states that crypto is directly correlated with the amount of stimulus in the economy. Therefore, with the Federal Reserve continuing to withdraw stimulus and raise interest rates, I expect the tumble to only intensify for the foreseeable future.
If asked is Bitcoin dead, I would say that the currency and other cryptos are likely to go into a deep slumber for many months, if not years.
Also likely to pull down the coins’ value are the continued financial problems that many crypto investors are likely to experience going forward.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.