Bitcoin’s Q2 performance is the worst the flagship currency has had in years, according to crypto analytics site Skew.
Bitcoin opened Q2 with a price tag of $58,800. However, as of press time, the digital asset was trading at $33,473, representing a loss of more than 40 percent. Skew noted that Bitcoin’s return for the second quarter of the year sits at -40% after falling from 102% in Q1.
As seen in the image above, Bitcoin’s Q2 returns from 2019 and 2020 were 157% and 42%, respectively. Q2 has traditionally remained a positive quarter for the leading cryptocurrency, with positive returns on six out of eight instances since 2014.
The last time Bitcoin registered a negative Q2 was in 2018, and it was a meager -6.70%.
What happened to this year’s Q2?
There are several factors responsible for Bitcoin’s seemingly overall poor performance in Q2.
As early mentioned, Bitcoin began Q2 on a very positive note. However, its prolonged Bull Run was cut short when its long-standing issues with the environment were brought to light by Elon Musk. The CEO of Tesla announced that his EV manufacturing company was longer going to accept Bitcoin payments due to its environmental impact. Musk disclosed on a May 12 tweet that:
[Tesla is] concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel… Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.
Following Musk’s tweet, Bitcoin sharply fell from $56,000 to $43,000 within a week, a 23% drop in price.
While Bitcoin was struggling to recover, China delivered another blow. The Asian nation, which has long controlled nearly 70% of Bitcoin’s mining hash rate, revealed that it was going to clamp down on Bitcoin mining. This fuelled yet another round of market crash, with Bitcoin dropping to almost $30,000.
In the weeks that followed China’s first crackdown comment, several Chinese provinces made real the threat by shutting down part or all Bitcoin mining facilities. Inner Mongolia, Sichuan, and Yunnan, which were major hubs for crypto mining activities, have all gone after miners. More recently, BTC PEERS reported that Yunnan had moved to shut down all major Bitcoin mining farms in the region.