Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Why are Bitcoin and other cryptos nursing losses after hitting highs?

Why are Bitcoin and other cryptos nursing losses after hitting highs?

Bitcoin and other cryptocurrencies have fallen sharply after seeing record-highs just last week.

Bitcoin’s price plunged to $58,400 (€51,000) on Tuesday and hovered just under the $60,000 (€53,000) threshold on Wednesday as the crypto market is again becoming a sea of red.

It marks a 12 per cent drop from the record high of $69,000 (€61,000) set on November 10.

The second-largest crypto Ether meanwhile plunged more than 14 per cent since its record last week to reach $4,244 (€3,7500).

The reasons why cryptos have been so volatile of late is unclear but there are a number of factors at play.

One reason may be due to market manipulation, argues David Gerard, the author of the book Attack of the 50 Foot Blockchain. And it is all to do with Tether, a blockchain-based cryptocurrency whose tokens are backed by an equivalent amount of US dollars.

Tether pumping up prices


"Tethers are supposed to be all backed by dollars. There's a lot of reasons like settlements with the authorities that suggest this has not been the case in the past, and we shouldn't presume it's the case now," Gerard told Euronews Next.

"So it looks like three billion Tethers, backed by nothing, were used to pump the Bitcoin price up at this particular time.

The reasons why cryptos have been so volatile of late is unclear but there are a number of factors at play.


"When they stopped, the Bitcoin price dropped. That's basically the story of the shenanigans that went on in the last week or two".

Gerard argues this kind of market manipulation and fake liquidity happens all the time.

"The basic thing that happened was the Bitcoin price, we know it's highly manipulated because this is an unregulated pool for sharks," he said.

"I think some fake liquidity was deployed. About $3 billion (€2.6 million) worth of questionable liquidity was deployed, which was used to pump the price up.

"That's the sort of manipulation that goes on in the Bitcoin markets all the time," Gerard added.

"Normal people look at this stuff (the crypto market) and think, 'Oh, that's a good market,' but they're the meat, they're the suckers, and the money comes from.

"This is a big boys game. And you'd better be prepared to be eaten alive," Gerard warned.

Stockpiling Bitcoin


The other reason for the crypto price slide is the continued fallout from China’s crackdown on Bitcoin mining, which led to an exodus of miners to the US and Canada.

China’s National Development and Reform Commission said on Tuesday it would continue to regulate crypto mining due to concerns over the amount of energy being used.

Gerard points out it is not just because of mining regulation that crypto prices have slumped. He argues those exiled miners have a billion dollars of Bitcoins that they are keeping as stockpiles and not selling them.

Gerard argues exiled miners have a billion dollars of Bitcoins that they are keeping as stockpiles and not selling them.


"No one can really account for this because Bitcoin miners have never behaved like that, except when they can't sell the coins because there aren't enough people with dollars to buy them.

"I think what's happening there is that all the dumb retail dollars have gone home and the markets are very thin at the moment, and that's why they're having to inflate them in artificial ways," said Gerard.

Cryptos may also have been affected by comments by Twitter’s Chief Financial Officer Ned Segal on Monday. He said investing in crypto “does not make sense right now”.

"We (would) have to change our investment policy and choose to own assets that are more volatile," Segal said.

But the hype around cryptocurrencies and blockchain has not dwindled. On Tuesday, the Staples Center in Los Angeles said it would be renamed the Crypto.com Arena, making it reportedly one of the biggest naming rights deals in history.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
×