Despite the cryptocurrency market navigating through a challenging phase, the underlying infrastructure continues to function robustly, according to Bitcoin Suisse's Executive Chairman Giles Keating in an interview with CNBC.
During today's discussion, Keating emphasized that the foundational blockchains of major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) are operating without technical issues. He attributed the recent market downturn primarily to the collapse of the TerraUSD (UST) stablecoin and subsequent turmoil in decentralized finance (DeFi) platforms.
Keating's observations follow the dramatic crypto market crash on Saturday, June 18, which was followed by a corrective upward movement on Sunday. Bitcoin's price briefly dropped below $17,800 during this turbulence before rebounding significantly. At the time of reporting, the leading cryptocurrency is trading at $20,495.25.
Similarly, Ethereum experienced a sharp decline, falling below $900 on Saturday. Like Bitcoin, the second-largest cryptocurrency by market capitalization has recovered its weekend losses and is currently changing hands at $1,127.53.
Reflecting on the crypto market's condition over the weekend, Keating suggested that the industry is approaching a critical juncture where excessive speculative leverage has been largely eliminated, creating conditions for a potential market bottom to form.
Regarding yesterday's substantial gains in both BTC and ETH, Keating indicated these positive movements signal the conclusion of major liquidation events that have been plaguing the cryptocurrency sector.
While Keating remains optimistic about the market bottoming out, Valkyrie Investments CEO Leah Wald maintains that the emerging asset class is still firmly in bear market territory. In her conversation with CNBC, Wald noted that Bitcoin has found support just below the $20,000 psychological level.
Wald explained that it's logical for Bitcoin to establish support below $20,000, as this price point represents where many institutional investors initially entered the cryptocurrency space. She added that 'these market participants will likely take all necessary measures to prevent their positions from becoming unprofitable.'
Wald predicted that the recovery process for the cryptocurrency ecosystem could extend over a longer period due to significant quality issues emerging within the industry.
She highlighted the example of crypto hedge fund Three Arrows Capital (3AC), which failed to meet margin calls, leading lenders to liquidate its positions. Furthermore, Wald discussed Celsius – which appears to be facing insolvency – noting that the platform's impact is far-reaching due to its role as a lender to numerous retail and institutional investors.
Echoing Wald's cautious stance, Dan Ives, Managing Director and Senior Equity Analyst at Wedbush Securities, also believes that the crypto winter is far from over.
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