The price temporarily fell below the 54,000 dollar (50,000.00 euro) mark, the lowest level since the end of February. At 54,025 dollars, the price was recently almost 8.3 percent below the previous day’s level. The oldest and most important digital currency has been under pressure for weeks. At the beginning of June, Bitcoin cost just under 72,000 dollars (66,667 euros).
Other digital currencies such as Ethereum, BNB and Solana also lost significant value. According to Coinmarketcap.com, the market capitalization of all cryptocurrencies recently fell by just over eight percent to $1.99 trillion.
Supply glut feared
Experts attributed the losses in Bitcoin and 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 exchange had announced that it would hand over a large number of Bitcoin tokens (BTC) to injured creditors. The injured parties have been waiting for years for a refund of their coins. This might lead to a glut of supply.
After the exchange collapsed in 2014, users lost a total of 850,000 BTC. Of these, 142,000 BTC were recovered and are now to be returned to their owners. The Tokyo marketplace was the world’s largest trading platform for the digital cryptocurrency in the early Bitcoin era. At the end of February 2014, Mt.Gox filed for bankruptcy following a hack, plunging the currency into its first major crisis of confidence.
Largest Bitcoin holdings belong to criminals
It is unclear how the former Mt.Gox customers will now behave. If a significant number of them want to sell the rescued Bitcoin holdings in the short term, this would lead to an oversupply of Bitcoin on the market. However, market observers at Glassnode have not yet recorded any major BTC transfers.
The concern regarding a Bitcoin oversupply is also fueled by the fact that law enforcement agencies are sitting on large BTC stocks that they have secured from criminals. The State Criminal Police Office of the German federal state of Saxony alone confiscated around 50,000 Bitcoin in January in the context of investigations into the illegal film exchange Movie2k.to. The Federal Criminal Police Office (BKA) is also said to regularly exchange confiscated BTC stocks for classic currencies such as euros or dollars.
The overall poor mood on the crypto market in recent weeks is also related to the US central bank, the Federal Reserve. It is currently unclear when and to what extent the Fed might loosen its monetary policy. The calculation here is: as long as interest rates are comparatively high, investors have many options to invest their money profitably. The crypto market then suffers as a result. If interest rates for classic investments fall, however, crypto investments appear more attractive.