Liquidation cascade puts crypto market into shock: Report
August was the worst month for the crypto markets since Bitcoin (BTC) bottomed out in November 2022. What was initially perceived by many as merely a summer slump turned into a pronounced market downturn as liquidations cascaded on the derivatives market, erasing 7.3% of BTC’s and 6.9% of Ether’s (ETH) value. Grayscale’s court victory was only a temporary reprieve from these losses, as the price retraced back to the levels starting out the month. This caused one of the largest liquidation events in crypto, totaling more than $1 billion lost when the price dropped to $26,000.
To further kick the industry when it was down, venture capital (VC) investment inflows were down 42.7% in August from July, only bringing in $401.9 million across 77 deals. Investment in the crypto industry was on the rise up until May of this year but has been steadily declining since.
The report is available for free on the Cointelegraph Research Terminal.
Exploring how the various sectors of the digital asset space have performed in this environment, Cointelegraph Research’s “Investor Insights Report” offers a concise monthly round-up of everything going on in crypto. It dives into venture capital, derivatives, decentralized finance (DeFi), regulation, mining and much more.
Venture capital (VC) investment in the blockchain industry has been declining since the second quarter of 2022 but has hit a new local low in 2023 with $401 million. Infrastructure projects had 18 individual deals and brought in $107 million in August, followed by centralized finance (CeFi) with $100 million only over three deals. Investments in this sector are lagging indicators, suggesting that investments will come back when the overall market sentiment shifts positive.
Howe
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