Bitcoin dropped below $60,000 last week, its lowest price in two years.
And against this backdrop, another downturn is happening across the larger cryptocurrency market, Bloomberg News reported Sunday (June 7), wiping out billions of dollars.
The report cited a recent video from Charles Hoskinson, founder of the Cardano crypto network, who warned users to prepare themselves for projects that disappear, businesses that run dry, and developers who leave the crypto space.
“I suspect there’s going to be a wave of failures,” Hoskinson said. “This year is going to be very hard.”
According to the report, tens of millions of crypto tokens have been launched in recent years, but just a fraction of that number – under 1,700 – generate meaningful daily trading volumes. Most venture-backed tokens trade at less than their launch price, in some cases more than 90% below, the report added, citing data from Delphi Digital.
“The broad token universe, excepting ether and bitcoin, peaked in 2021,” Cosmo Jiang, a portfolio manager at Pantera Capital, told Bloomberg.
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“We are already seeing a major shakeout. A lot of tokens are down 80-90% already. The reality is there are still many tokens that still have multibillion market caps that don’t have a good reason to exist.”
The report said bitcoin has declined by 17% so far this month to a low last seen in 2024. By midday on Friday, more than $1.7 billion of digital assets had been liquidated in a 24-hour period, Bloomberg added.
Meanwhile, stablecoins are “behaving as if the downturn barely matters at all,” as PYMNTS wrote last week.
This came after banks, card networks, FinTechs and crypto-native companies accelerated a series of moves that collectively suggest a growing investment into the next stage of real-world adoption. The emphasis has moved toward how programmable dollars can improve the mechanics of moving money across networks where timing, liquidity and operational efficiency are the most important.
However, PYMNTS added, one of the most revealing developments, came from a group of major banks who introduced a tokenized deposit network designed specifically to offset the rise of stablecoins.
“The move acknowledged stablecoins as a competitive threat and demonstrated how seriously traditional finance now views programmable dollars,” the report added.
“Banks are no longer debating whether tokenized money has a future. They are racing to ensure they can protect and grow their role in it.”