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Crypto Price Check: Bitcoin Remains 'Stuck in the Mud'

Bitcoin goes flat in risk-wary Wall Street while as the SEC proposes 'one rule book' governing cryptocurrency companies.
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If anyone has any good news about cryptocurrencies, now would be a good time to share it.

The sector has been taking a beating for several weeks as cryptocurrencies became tied to the stock market.

Bitcoin was essentially flat at $20,775.80 at last check, according to CoinGecko, down nearly 70% from its Nov. 10 all-time high of $69,044.77.

'Stuck in the Mud'

Ether, the native cryptocurrency of the Ethereum platform, was up marginally at $1,191.10 and dogecoin was up 1.5% to $0.072392.

"Bitcoin remains stuck in the $20,000 mud as risk aversion returns on Wall Street," said Edward Moya, senior market analyst for the Americas with Oanda. "Bitcoin remains a risky asset with a strong correlation to equities, which means it probably won't be seeing any support anytime soon." 

The mood for risky assets is to fade all rallies, Moya said, "which means Bitcoin should remain trapped in its tight trading range a little while longer." 

Goldman Sachs analyst Will Nance on June 27 downgraded cryptocurrency exchange platform Coinbase  (COIN)  to sell from neutral with a price target of $45, down from $70.

Nance said he believes current crypto asset levels and trading volumes imply "further degradation" in Coinbase's revenue base, which he sees falling 61% year-over-year in 2022 and 73% in the back half of the year.

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'Substantial Reductions'

Coinbase recently announced a significant restructuring, but the analyst said further cuts are needed, as the announced cost reduction effort merely brings headcount back to end of first quarter levels and resulted in the company moving to the low end of its previous expense guidance.

Nance said he believes Coinbase will need to make "substantial reductions" in its cost base in order to stem the resulting cash burn as retail trading activity dries up. He downgraded the shares given the "continued downdraft" in crypto prices and the resulting fall in industry activity levels.

NFTs, or non-fungible tokens, have also been losing value. However, Winston Ma, managing partner of CloudTree Ventures, and author of "Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse," said there were still huge crowds of NFT and Web3 enthusiasts gathered at the recent annual NFT.NYC summit.

"The NFT market is slumping close by Bitcoin, Ethereum (ETH) and the broad cryptocurrency market," he said. "The decrease in the dollar worth of ETH has elevated the decrease in the NFT market, as many NFTs are dominated in ETH unit."

"But the NFT. NYC was filled with vibrant enthusiasm for the future which much of the Web3 community seems to feel — despite the recent sell-off of the crypto market," Ma said.

Separately, the hedge fund Three Arrows (3AC) defaulted on a loan worth more than $670 million, digital asset brokerage Voyager Digital said on June 27.

David Lesperance, managing partner of immigration and tax adviser at Lesperance & Associates, said that in the midst of the crypto meltdown, Sam Bankman-Fried, founder of crypto trading platform, "is trying to play a modern day JP Morgan by bailing out key players in the crypto ecosystem."

He said that FTX has made an additional $200 million of credit and a separate 15,000-bitcoin revolving facility available to Voyager Digital.