BlackRock issues unprecedented Fed warning after $300 billion collapse in Bitcoin and other crypto assets

Since the beginning of June, there has been a dramatic turn of events that has resulted in the entire crypto market losing a whopping $300 billion.

The price of Bitcoin, which was stable above $70,000 at the beginning of the month, has fallen sharply. The price drop was triggered by a strict interest rate warning from the US Federal Reserve by Treasury Secretary Janet Yellen. Now analysts at Blackrock, who work for the world’s largest asset manager, have also expressed their concern and described the developing scenario as unprecedented.

The price crash has affected many industries, especially those where cryptocurrency use is more widespread. One of these is online gambling: Bitcoin casinos have taken the US by storm. From Telegram-centric platforms to Bitcoin sites with proprietary tokens, a digital revolution is underway in the iGaming industry, as this guide to crypto casinos shows. Given the potential for iGamers to profit from lower crypto prices, here’s more on what the Fed warning means and what the recent Bitcoin crash means for the market as a whole.

The Federal Reserve’s stance

What prompted Treasury Secretary Janet Yellen to issue this warning is the fact that the Federal Reserve has so far kept interest rates unchanged, even as inflation has fallen. Another reason is that the central bank is still nervous despite signs of a slowdown in price growth.

But while economic activity is increasing and employment numbers are still robust, inflation remains too high. With these factors pointing to a market recovery, the Fed has forecast only one rate cut in 2024, as opposed to the two or three rate cuts originally expected.

Warning from BlackRock

The warning from BlackRock analysts expresses their concern about the development of an “unprecedented” scenario in the crypto space. While the details of this scenario are not yet known, they have said that it could potentially affect both Bitcoin prices and the crypto market as a whole. Given the seismic positions BlackRock is taking in various asset classes, their words have unsurprisingly left many investors uneasy.

Market dynamics

As for the impact of these warnings on the market, Bitcoin and other cryptocurrencies have been falling since the beginning of June, wiping out $300 billion across the entire crypto market. These price drops coincided with Treasury Secretary Janet Yellen’s warning and caused traders to adjust their positions.

Although the market fears a potential $4 trillion loss, many retail crypto users are benefiting from the price drop. It also bodes well for new crypto owners looking to gain a foothold in the market, and other traders as well, whether it allows them to buy more from online stores that accept crypto, amass larger bankrolls on their favorite crypto gambling site, or build larger holdings than was previously possible.

The influence of Bitcoin miners

Another factor that may have played a role in the Bitcoin price crash is that miners put a lot of selling pressure on the market after the halving event in April failed to produce the massive price increases that many had expected. Since the halving event effectively means a halving of Bitcoin production, miners started selling coins to maintain profitability and cover operating costs.