Bitcoin Slumps in April: Worst Month Since FTX Collapse
Bitcoin experienced its worst month since the collapse of Sam Bankman-Fried’s FTX empire, with a nearly 16% slump in April. The excitement surrounding US exchange-traded funds for the digital asset has waned, leading to a drop in demand for risky investments.
The record high of almost $74,000 in March fueled by the US-ETF frenzy has now given way to a price of around $60,000 for Bitcoin. This decline has also affected other cryptocurrencies, with Ether and Solana experiencing deeper losses, along with memecoins. Shares of crypto companies have also closed lower.
The month of April saw a net outflow of $182 million from US spot ETFs, a stark contrast to the $4.6 billion in net inflow seen in March. The approval of these funds by the US Securities and Exchange Commission in January had sparked optimism in the market.
Despite the much-anticipated Bitcoin halving event on April 19, which historically acted as a price tailwind, the impact was minimal this time. Stocks of crypto mining companies also took a hit, with Marathon Digital Holdings Inc., Riot Platforms Inc., Cleanspark Inc., and Cipher Mining Inc. all seeing declines.
Market watchers had turned their attention to Asia for a potential boost, with the debut of Bitcoin and Ether spot ETF listings in Hong Kong. However, the lackluster performance of these new ETFs failed to inspire investor confidence, with trading volume far below expectations.
Ether, the second-largest token, also saw a significant decline in April, marking its largest monthly drop since June 2022. The SEC’s scrutiny of Ether and the legal battles between the agency and the crypto industry have added to the uncertainty in the market.
Overall, the cryptocurrency market has been on a rollercoaster ride in April, with Bitcoin’s slump and the struggles of other tokens reflecting the volatile nature of the digital asset space. Investors will be closely watching for any signs of a turnaround in the coming months.
