Bitcoin drops below $54.000, fear hits market
Bitcoin recently dropped below $54,000, reaching its lowest point since February, with significant liquidations totaling $665 million in the last 24 hours. This drop, which saw Bitcoin’s price fall to $53,499 on Coinbase, is attributed to several key factors. Notably, the transfer of 47,229 BTC by the defunct Mt. Gox exchange and the German government’s sale of 7,583 BTC have contributed to the sell-off.
The overall cryptocurrency market also experienced a downturn, with other major cryptocurrencies like Ether and Solana seeing nearly 10% declines. Ether fell below the crucial $3,000 level for the first time since mid-May, hitting $2,898. Data from CoinGlass indicated that the recent liquidations include $584 million in long positions and $82 million in short positions, with Bitcoin long positions alone accounting for $222 million of the total.
The Crypto Fear and Greed Index, which measures market sentiment, has dropped to its lowest level since January 2023, reflecting a state of “Fear” with a score of 29 out of 100. This sentiment is influenced by the anticipated sell pressure from Bitcoin creditor paybacks by Mt. Gox, amounting to $8.5 billion. The recent transfer of 47,229 BTC by Mt. Gox to a new address, valued at around $2.6 billion, marked a significant movement since May.
The German government has also played a role in this market pressure, having sold 7,583 BTC worth $419.5 million since June 19. The government still holds 42,274 BTC, valued at about $2.3 billion.
Amid these developments, Markus Thielen, an analyst at 10x Research, has predicted that Bitcoin could potentially drop as low as $50,000 due to the prevailing sell pressure. This prediction comes as the Bitcoin price slightly recovered to $54,300 but remains down by approximately 7.4% in the last 24 hours.
In conclusion, the combination of substantial BTC transfers by Mt. Gox and the German government, along with broader market liquidations and negative sentiment, has significantly impacted Bitcoin’s price, causing it to plummet below the $54,000 mark. Analysts and traders are closely monitoring these developments, with expectations of continued volatility and potential further declines in Bitcoin’s value.
Source: Cointelegraph
Mt. Gox Transfers $2.7B in Bitcoin Ahead of Creditor Repayments
Mt. Gox, the collapsed Japanese crypto exchange, has transferred 47,229 Bitcoin, valued at $2.71 billion, to a new wallet. This significant move aligns with Mt. Gox’s plan to begin repaying its creditors in July. The exchange, which has been inactive for over a decade, is set to return $8.5 billion worth of Bitcoin to creditors. On July 5, it also moved 1,545 BTC to Bitbank’s hot wallet.
Concerns about a massive sell-off affecting Bitcoin prices have been raised, but some analysts believe the impact will be less severe, around $4.5 billion. Alex Thorn from Galaxy Digital noted that many creditors might hold their Bitcoin longer to avoid capital gains taxes. This comes after a similar large transfer on May 28, which caused a slight dip in Bitcoin’s price. Currently, Bitcoin is trading at $57,226, down 6.9% for the week but up 35.6% year-to-date.
Source: Cointelegraph
UK election win Labour could drive focus on tokenization and CBDCs
Opinion polls suggest the UK’s Labour Party, led by Keir Starmer, may win the General Election. Financial services executive Nigel Green urges Starmer to pursue current PM Rishi Sunak’s vision of making the UK a “global crypto hub.” Starmer’s position on crypto is unclear, but Labour’s shadow finance minister Rachel Reeves and shadow city minister Tulip Siddiq support tech and tokenized assets.
Labour plans to embrace securities tokenization and a central bank digital currency (CBDC) as part of its vision for the UK. Green highlights the need for a clear regulatory framework to foster innovation and ensure security for businesses and investors.
He emphasizes that the City of London, already a global financial leader, could enhance its status by adopting cryptocurrency and blockchain technology. Combining London’s financial infrastructure with progressive crypto regulations would attract international businesses and investors, driving economic growth, creating jobs, and nurturing innovation.
Coinbase’s advocacy group, Stand With Crypto, proposed seven UK crypto policy recommendations ahead of the election. Their manifesto calls for promoting the UK as a global web3 and tokenization hub and establishing a joint industry-government task force to identify opportunities. They advocate for swift legislation for crypto assets, adhering to the principle of “same risk, same regulatory outcome,” and regulating fiat-backed stablecoins to foster competition in digital payments.
Stand With Crypto also prioritizes recognizing staking as a regulated activity and ensuring retail participation, crucial for proof-of-stake blockchain innovation.
Source: The Block