Crypto Trading Plummets as Much as 40% During the Month of June

Mining and trading crackdown in China plus high volatility are the biggest contributors behind the significant dive.

Not the Finest Hour

Last month was not the finest hour for cryptocurrency trading volume and there was a reportedly huge drop of as much as 40%. CryptoCompare, a price and volume tracking organization, is behind the recent data and blames lower prices and volatility as being the reason for the sudden decline. The latest crackdown on mining and trading in China hasn’t helped and is another contributor to the low numbers.

“The Chinese crackdown has caused a lot of fear, which is showing up in markets,” said Teddy Vallee, chief investment officer at Pervalle Global. “The digital asset ecosystem got punched in the face, so it’s currently up against the ropes versus fighting in the middle of the ring. Typically when you have large sell-offs, participants are quite fearful and pull back their chips.”

Miners Leaving China

As China is going all in on launching its own central bank digital currency, they put a halt to cryptocurrency at the end of June. The move had a serious effect on mining operations in many areas of the country, where as much as 60% of all BTC mining power was being used. The result? Miners leaving China and not willing to trade as much of the newly mined BTC.

According to Gabor Gurbacs, Director of Digital Assets Strategy at VanEck, summer could be a time of lower volume anyway. However, Gurbacs believes that investors may still be feeling the aftermath of the crypto market having taken a heavy hit on its value during 2021.

New Investors Losing Interest

Perhaps the most likely catalyst for this fall is the decline in bitcoin prices. When BTC reached $60,000 in April, it brought on a ton of new interest from new investors, taking their first curious steps in the world of cryptocurrency trading. Having had to invest a lot at a top prize, they lost a lot of money as the prize has dropped to the much lower $30.000 it’s sitting at today.

Other coins, such as ETH and DOGE are also experiencing a price drop lately which will have an impact on the market .

Even though the crypto frenzy was in full bloom earlier this year, because of the many ups and downs of the market, these people have been spooked, making them extra careful and in some cases losing interest completely. This may take a while to recover from.