The selloff in bitcoin in the second quarter broke the bull case for the highly speculative cryptocurrency.
According to Dow Jones Market Data, the digital asset dropped 41% in the second quarter. That was the worst decrease in bitcoin since a 43 percent drop in the fourth quarter of 2018, and the fourth-worst drop in the decade-plus history of the cryptocurrency.
“We can say with absolute certainty that the hype has left the market,” said Mati Greenspan, who writes the Quantum Economics newsletter. Because bitcoin is mostly driven by momentum and speculation, this is a bigger issue than it is for other assets.
Bitcoin did not fall as a result of widespread panic. The S&P 500 gained 8.2%, while the Nasdaq Composite gained 9.5 percent. The price of U.S. crude oil increased by 24%, while gold, the asset to which many bitcoiners link the digital currency, increased by 3.3 percent.
Throughout the quarter, there was a continual storm of inquiries concerning bitcoin’s cyclical upturn, its energy needs, and its risks. China took action against the industry, and officials in many other countries expressed concern. Elon Musk sent out a tweet.
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