The largest bitcoin in the continuing sell off has eroded over 35% of its value in the last 1-month. If we just take random price as on June 4, 2022 of $29681 and compare with last traded price as on Coindesk.com of $19124, it comes to be a steep loss of over 35%. In fact as per reports this is the biggest monthly fall in 11 years time. Further, the fall from its peak price of around $69K is a huge over 70%.
As we write other altcoins at around 11:32 am (IST) have gained some momentum with most of the Top 20 cryptoassets as compiled by Coindesk trading in the green.
Currently, what is weighing on crypto assets is the highly uncertain global economic situation. This said there is an assessment being made on the impact of the higher interest rates plus there is also a looming threat of recession. Amid such a situation, there is no substantial factor as of now that is enough to prop up digital tokens.
Also, it is viewed that the new tax structure for cryptos introduced in India is not in favour of the asset class. Pertinently budget 2022 introduced section 115BBH as per which all the gains from the transfer of VDAs shall be taxed at the rate of 30%. This is without allowing for any deduction as against expenses or set off of any loss. Also, 194S has been introduced for deducting TDS at the rate of 1% on all VDA transfers. Note these provisions come into effect from the new Fy23 (2022-23).
So, this is a comparably higher tax levy on cryptos even if the person has no other income source.
What is letting the crypto bears to not slow down? How stakeholders' view the ongoing Bitcoin fall?
As per experts from the domain, volatility in cryptos is unnerving and there are bumps along the way. So, while the current market is highly bearish, cryptos will see recovery as estimated and analysed by experts.
Since the launch in 2009, this is the second worst fall in a month for Bitcoin. The prime reasons attributed for such losses during the month are deteriorating macros globally, looming fears of inflation and systemic risk within the crypto space.
"The losses were caused by many factors," chairman of crypto investment firm Centurion & Co is quoted as saying in a Kitco report. "These included monetary policies bordering on central banks' response to rising inflation fueled by COVID-19 and the ongoing Russo-Ukrainian war.
"From Terra's collapse to the liquidation of Three Arrows Capital and unending layoffs, the bad trend in the crypto industry weighed down the price of bitcoin," he added, noting he expected institutional investments "to pour into the asset" and create "better price performance" in July.