Now that the cryptocurrency market has rebounded somewhat from the mid-June lows — which were as low as any since 2020 — and volatility is muted by crypto standards, many investors are asking if we’ve seen the bottom. The forced de-levering from earlier in the month seems to be over, and the scattered collapses in various digital assets do not seem to have triggered an unstoppable cascade. Remaining investors seem to have the will to withstand further declines if they happen, and surviving crypto institutions seem to be in reasonably good shape.
Even if the worst is over, we don’t know if there will be a rapid recovery. Recall that after the 50% decline from April to July 2021 prices quickly rebounded to a new peak but following the crash that began in December 2017 it was more than two years before prices increased on a sustained basis.
