As a researcher with experience in the cryptocurrency market, I believe that the recent selloff in Bitcoin’s price can be attributed to two primary factors: miners dumping their holdings and fears of Mt. Gox selling large quantities of Bitcoin.
The value of Bitcoin experienced a significant drop at the beginning of the week, leading to approximately $300 million worth of cryptocurrency being liquidated in one day. What could have caused this unexpected price fluctuation?
As a crypto investor, I’ve observed that Gayatri Choudhury, the Quantitative Research Analyst at Bitwise, has identified two primary factors behind the recent market downturn. These factors don’t stem from the Bitcoin ETFs.
Miners Are Dumping
As a crypto investor, I’ve observed an intriguing trend among Bitcoin miners since the latest halving in April. This often-neglected group has been selling off their BTC in significant quantities. The reason? Their revenues have plummeted due to historically low prices per coin mined, and competition from global rivals has reached unprecedented heights.
On June 9th, over 3000 Bitcoin were moved from mining pools to Binance, reaching a two-month high, according to Choudhury’s statement. Using data from CryptoQuant’s dashboard, the analyst pointed out that such massive sell-offs typically coincide with price drops, as observed following the April halving and late May events.
Earlier this month, CryptoQuant released a report attributing the recent aggressive miner selloffs to a significant portion by Marathon Digital (MARA), the largest publicly-traded Bitcoin mining firm. During June, they sold off approximately 1400 Bitcoins, accounting for around 8% of their entire Bitcoin holdings.
Mining companies sold a record-breaking 1200 Bitcoins through Over-the-Counter (OTC) desks on June 10, according to the observations of both Bitwise and CryptoQuant. In contrast, over $4.5 billion worth of assets were transferred from miner holdings to regular exchanges during the month of June, as mentioned by Choudry.
Choudry pointed out that miners are motivated by slim profits due to the network’s halving event. She explained, “The average miner’s earnings, calculated per terahash of energy invested, have decreased by approximately 56% post-halving.”
Mt. Gox Fears
As a market analyst, I’d like to point out that the announcement from Mt. Gox on Monday added fuel to existing market concerns. The exchange, which has been dormant for the past ten years, revealed its intention to repay customers their long-lost Bitcoin in July. With over 141,000 BTC, worth approximately $8.5 billion, at stake, investors are bracing themselves for a potential wave of sell pressure once the repayment process begins.
“Despite current difficulties, consider this: a year ago, Bitcoin’s price was at $30,000, and a year prior to that, it was only at $10,000,” Choudhury reminded us.
As a researcher studying the cryptocurrency market, I’ve noticed that although the potential bearish impact of Mt. Gox sell pressure remains to be seen, there is growing excitement among crypto investors regarding the anticipated launch of Ethereum ETFs in the United States during the same month. According to K33 Research analysts, these ETFs are projected to attract approximately $4 billion in investments within their initial five months of operation.
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2024-06-26 02:34