2024-07-06 19:44:41
Digital currencies on the decline: Bitcoin and Ethereum are recording heavy losses. Is the crypto market facing further panic selling?
The price of Bitcoin fell significantly by lunchtime on Friday. It fell from around 58,500 US dollars to 54,376 US dollars (50,100 euros). For a short time, the price even dropped below the 54,000 US dollar mark. Since its high at the beginning of June, the world’s oldest and most important cryptocurrency has lost over 23 percent of its value. The price has now recovered slightly.
But it is not just Bitcoin that is under pressure. The second largest cryptocurrency, Ethereum, also lost 16 percent on a weekly basis: the losses have already amounted to almost 25 percent in one month. Ethereum is currently trading at around 2,850 US dollars (2,640 euros).
Bitcoin
53.307,36 EUR-17,93%
Current ChartPeriod 1 month21:41Bison
Bitcoin Crypto
- Hoch
- 66.029,93
- Intermediate value High / Medium
- 62.086,76
- Mittel
- 58.143,59
- Intermediate value medium / low
- 54.200,42
- Deep
- 50.257,25
03.06.10.06.17.06.24.06.01.07.
Other digital currencies such as Solana (-15 percent), Litecoin (-21 percent) and Polkadot (-16 percent) also lost significant value within a week. Why are investors selling their holdings now and is this a normal market correction or will prices continue to fall?
Experts attributed the losses in Bitcoin and the other cryptocurrencies on Thursday and Friday morning, among other things, to a statement from the insolvency administrator of the failed crypto exchange Mt.Gox.
The company had announced that it would hand over a large number of Bitcoin tokens (BTC) to affected creditors. The victims have been waiting for years for a refund of their coins. If such a quantity of Bitcoins were to come onto the market in a short period of time, there would be fears of price turbulence.
The background is the collapse of the Mt.Gox stock exchange in 2014 following a hacker attack – which plunged the crypto industry into the first major crisis of confidence for digital currencies.
The marketplace in Tokyo in the early Bitcoin area was considered the world’s largest trading platform for digital cryptocurrencies. Users lost 850,000 Bitcoins at the time. Of these, 142,000 Bitcoins were recovered and are now to be handed over to their owners.
Former customers of the once largest Bitcoin exchange Mt.Gox are faced with the decision of dumping their rescued Bitcoin holdings on the market. Experts fear that a massive sell-off could exceed supply and drastically affect the Bitcoin price.
However, market observers from the analysis platform “Glassnode.com” have not yet identified any significant Bitcoin transactions that would indicate impending selling pressure. It remains unclear whether sales of Bitcoins, which have increased massively in value since 2014, have already begun or whether investors are taking precautionary measures to sell their holdings in view of the uncertainty and the continued decline in prices.
Concerns about a potential oversupply of bitcoins are compounded by the fact that law enforcement agencies are sitting on large amounts of the cryptocurrency seized as part of investigations into criminals.
For example, in January the Saxony State Criminal Police Office confiscated around 50,000 Bitcoins as part of its investigations into the illegal film exchange platform Movie2k.to. It is also reported that the Federal Criminal Police Office (BKA) regularly converts Bitcoin holdings in its hands into traditional currencies such as the euro or the dollar.
According to experts, the persistently bad mood on the crypto market in recent weeks could also have something to do with the decisions of the US Federal Reserve. The US Federal Reserve continues to believe that its restrictive monetary policy is justified.
This is evident from the minutes of the June meeting published on Wednesday. Price pressures are easing and the economy is cooling down, the monetary authorities noted. Nevertheless, they do not believe the time has yet come for a rate cut. They need more data to ensure that rate cuts will sustainably support the central bank’s two percent target.
In times of high interest rates, investors have many opportunities to invest their capital with high returns. This means that traditional forms of investment such as stocks or bonds appear more attractive and the crypto market suffers as a result. However, if interest rates fall, investments in cryptocurrencies could become popular again.