Key Takeaways
- Bitcoin recorded its worst monthly performance since September 2011, down over 37%
- The entire crypto market declined almost 18%, ending the month at a valuation of $933bn
What Caused This To Be The Worst Month In 10 Years?
Bitcoin suffered a devastating crash this month. The consequences are still reverberating in the crypto space as the digital asset is struggling to gain upside traction. In early May, bitcoin was trading above the $57,000 mark. Ten days into May, the token reached its monthly high of $59,500. As investors and traders attempted to push the asset back near all-time highs but were unable to pierce the $60,000 milestone.
After bitcoin reached its monthly peak on May 10, the price made a U-turn. It started sliding on bad news for the future of the crypto industry. A whirlpool of negative press knocked investors’ confidence in the crypto market as participants rushed for the exits. A report by Chinese authorities stated that China will crack down on cryptocurrency trading and mining. The news spread quickly. Soon after the Black Wednesday in cryptocurrency was born, Bitcoin slid over 30% on May 19. The entire cryptocurrency market erased over $500bn from its valuation.
In addition, Iran banned all cryptocurrency mining for the next four months. The high consumption of electricity had caused blackouts and power shortages across the country that some days lasted up to six hours. Estimations point that about 4.5% of all bitcoin mining globally between January and April of this year took place in Iran.
Consequences Felt Throughout the Market
As a result of the looming uncertainty in the short-term, crypto participants retreated from the market. And the price of bitcoin reached a monthly low of $29,800. Soon after the Black Wednesday event, bitcoin’s price moved slightly higher. It finished the month consolidated around $36,600. The entire market capitalization was sealed at $933bn by the end of May.
Statistically, in May, bitcoin slid more than 37%. It experienced its worst performance since September 2011 when the digital coin dropped 40%. Its price had hovered around $5. Ether, the second largest cryptocurrency, sealed a 5% decline for May as the token logged its first negative month since September 2020.
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