Bitcoin
With a 20% drop in a month, is it still worth buying Bitcoin?
BitcoinBitcoin (BTC) has surged nearly 50% in the first half of 2024. Three main catalysts have driven the rally: the Securities and Exchange Commission’s approval of the first spot-priced Bitcoin exchange-traded funds (ETFs) in January; the April halving, which cut mining rewards in half and slowed the growth of new coin supply; and investor hopes that the Federal Reserve would begin cutting benchmark interest rates. The rally has been aided by bullish price forecasts, such as Ark Invest’s Cathie Wood’s prediction that a single Bitcoin would be worth $1.5 million by 2030.
But over the past month, Bitcoin’s price has fallen by about 20% as it has faced two major headwinds: the long-awaited disbursement of bitcoins from the bankrupt cryptocurrency exchange Mt. Gox, and the German government’s liquidation of thousands of bitcoins seized from the movie piracy operation Movie2k. Investors should buy Bitcoin after this strong retraction?
Image source: Getty Images.
Will Mt. Gox customers quickly liquidate their recovered assets?
Years ago, Mt. Gox was one of the world’s leading cryptocurrency exchanges, but it lost around 950,000 bitcoins in a series of attacks that began in 2011. Those bitcoins were worth only around $285,000 at the beginning of 2011, but today they’re worth $53.6 billion.
The extent of these security breaches wasn’t fully revealed until 2014, when Mt. Gox abruptly shut down its exchange and filed for bankruptcy. Over the next decade, the exchange recovered 140,000 of its lost bitcoins, worth about $7.9 billion today, and this month, it finally began paying off about 20,000 of its creditors in bitcoin and bitcoin cash (an altcoin derived from the cryptocurrency).
Bitcoin was trading at just around $600 when Mt. Gox collapsed, but its price has risen more than 9,200% to around $56,000 over the past decade. So Mt. Gox creditors may be tempted to liquidate a large portion of the Bitcoin they’re finally recovering — and fear of those sales is driving its price down. But the entire $7.8 billion payout represents less than 1% of Bitcoin’s $1.1 trillion market cap, so those concerns don’t really seem to justify the 20% decline over the past month on its own.
Will the German government increase this selling pressure?
In 2013, German authorities shut down the movie piracy website Movie2k and seized nearly 50,000 bitcoins in the operation. That loot is now worth an estimated $2.8 billion.
The German government recently transferred a large portion of these coins to cryptocurrency exchanges, selling approximately 9,500 bitcoins in two large transactions. It is still holding more than 40,000 bitcoins, according to Arkham Intelligence, and investors are worried that it will liquidate even more tokens in the near future.
The story continues
Justin Sun, the controversial founder of the decentralized blockchain operating system TRON, recently offered to buy most of the remaining Bitcoin holdings from the German government in a $2.3 billion off-market transaction to mitigate the impact of the sale on the market price. It’s unclear whether the German government will agree to this offer, but it does show that some large crypto investors are becoming concerned about a panic-inducing sell-off. However, a $2.3 billion sale would only amount to about 0.2% of Bitcoin’s market cap — so it seems like a lot of sound and fury that doesn’t really mean anything to long-term investors.
The dip looks like a buying opportunity
In the first half of the year, spot ETF approvals and the halving were important events that had the potential to significantly increase market demand for Bitcoin. But as we look toward the second half of the year, we see fewer short-term catalysts — so many investors are likely focusing more on short-term headwinds like Mt. Gox and the German government.
I am still optimistic I’m very cautious about Bitcoin’s future and I think its latest pullback represents a good buying opportunity for long-term investors. Its price may remain volatile, but patient investors who don’t obsess over its potential sell-off could be well rewarded in the coming decades.
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With a 20% drop in a month, is it still worth buying Bitcoin? was originally published by The Motley Fool
Bitcoin
‘This is huge’ — Billionaire Mark Cuban issues ‘incredible’ Bitcoin and crypto prediction amid price slump
Bitcoin has surged again this year under former President Donald Trump Cryptocurrency boosts US presidential election in November with ‘revolutionary’ plan.
The price of bitcoin has surged to more than its all-time high in recent months, surpassing $70,000 per bitcoin and triggering a wave of mega-optimistic predictions about the price of bitcoinalthough it fell again this week to below $65,000 after the Federal Reserve kept interest rates steady.
Now, as Elon Musk suddenly breaks his silence on bitcoin and cryptocurrenciesBillionaire investor Mark Cuban called a California plan to digitize 42 million car titles using blockchain an “incredible step forward” and “huge” for cryptocurrencies.
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Mark Cuban, famous Shark Tank investor and billionaire owner of the NBA team Dallas Mavericks, has… [+] called a cryptocurrency update “amazing” amid bitcoin’s price slump.
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The California Department of Motor Vehicles (DMV) has digitized 42 million car titles using blockchain, it was reported by Reuters, through technology company Oxhead Alpha on the Avalanche blockchain and designed to detect fraud and facilitate the securities transfer process.
“This is an incredible development for crypto,” Cuban, best known as an investor on TV’s Shark Tank and owner of the Dallas Mavericks NBA team, posted on X, joking that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could sue the state as part of his hostility toward cryptocurrencies and blockchain technology.
“The reason this is huge for crypto is because people who hold the tokens will have an app with an Avalanche wallet,” Cuban said. “Tens of millions of Californians having and using a crypto wallet in the next five years, or however long it takes, normalizes the use of wallets and crypto.”
John Wu, president of Avalanche developer Ava Labs, told Reuters that California’s DMV is “creating a wallet that you can download on your phone.”
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Bitcoin’s price has rallied this year, triggering a wave of bullish bitcoin price predictions from… [+] people like billionaire Mark Cuban.
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Last month, Cuban predicted that if the US dollar falls as the global reserve currency, bitcoin could become “a global ‘safe haven’” and a “global currency.” potentially sending the price of bitcoin to a much higher level.
According to Cuban, bitcoin could become what its most ardent supporters “envision” — a means “of protecting our economies… This is already happening in countries facing hyperinflation.”
The price of bitcoin has skyrocketed over the past year, largely due to the world’s largest asset manager, BlackRock, leading a bitcoin attack on Wall Street.
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U.Today – Renowned economist and cryptocurrency critic Peter Schiff has criticized Michael Saylor’s recent hype about the growing adoption of cryptocurrencies as a strategic treasury asset by corporations.
Michael Saylor, a well-known Bitcoin advocate and president of MicroStrategy, recently shared his enthusiasm on X about the growing adoption of Bitcoin as a strategic treasury asset.
Citing a comment made by Bitcoin investor Bill Miller in a recent interview with CNBC, Saylor tweeted: “We now have more companies coming forward and saying we will put Bitcoin on our balance sheet as a strategic treasury asset.”
However, not everyone shares Saylor’s enthusiasm. Schiff, a vocal Bitcoin critic and gold bull, was quick to respond with his usual skepticism. In a pointed tweet, Schiff argued: “Bitcoin is neither strategic nor appropriate as a treasury asset. Companies should not risk shareholder funds. They should pay dividends and let shareholders risk their own money.”
Bitcoin enthusiasts are not intimidated
However, Schiff’s criticism shouldn’t deter Bitcoin enthusiasts, who often take Schiff’s words with a pinch of salt. To put things in context, Michael Saylor began buying Bitcoin in 2020 as an inflation hedge and alternative to money. Saylor’s company, MicroStrategy, is among the largest public holders of Bitcoin in the world. As of June 20, it held 226,331 BTC, purchased for around $8.33 billion at an average price of $36,798.
Over the weekend, Schiff was surprised when 87% of the more than 11,000 Bitcoin holders who responded to his X survey said they would not sell any of their Bitcoin even if the price dropped more than 99% to $120. They said not only would they not sell, but that they would continue to buy even when prices dropped.
Schiff unexpectedly revealed that “the main selling point for investors to buy Bitcoin is its excellent past performance record.”
At the time of writing, Bitcoin is trading at $66,067, having reached all-time highs of nearly $74,000 in mid-March.
In a week of drastic fluctuations, the price of Bitcoin (BTC) has retreated from its highs and is currently trading at US$66,250, down 0.9% in European trading.
This volatility comes on the heels of a significant surge above $70,000 earlier in the week, fueled by former President Donald Trump’s ambitious cryptocurrency plans announced in a Bitcoin Conference in Nashville.
Trump’s announcement to fire Securities and Exchange Commission Chairman Gary Gensler and establish a strategic Bitcoin reserve if elected president has temporarily sent the cryptocurrency market into a frenzy.
However, the excitement was short-lived as a series of events unfolded which caused investor sentiment to sour.
A significant sell-off of about 8% was triggered when the US Marshals Service moved $2 billion in Bitcoin for new wallets.
This move has reignited fears of a potential large-scale liquidation, compounded by lingering concerns over a possible Bitcoin liquidation from Mt. Gox. Early this morning, Mt. Gox administrator transferred US$2.2 billion value of your BTC assets in a new wallet.
Meanwhile, the US Bitcoin ETF spot market is showing signs of fluctuation, according to data from SoSo Value. On July 30, Bitcoin spot funds experienced their first net outflow in five days, totaling $18.3 million.
The Grayscale Bitcoin Trust (GBTC) saw outflows of $73.6 million, while the BlackRock iShares Bitcoin Trust (IBIT) attracted $74.9 million in inflows. But outflows from other funds left the category in the red at the end of Tuesday’s trading session. The total net asset value of spot Bitcoin ETFs currently stands at a substantial $58.5 billion.
In other crypto news, Ripple (XRP) is up 8.6% in the past 24 hours, hitting over 64 cents – its highest point since March 25, according to CoinGecko. data.
This rally comes amid a scheduled token unlock and growing optimism around a potential deal in the long-running SEC vs. Ripple lawsuit.
The crypto community is closely watching the SEC’s actions, particularly its intention to amend its complaint against Binance regarding “Third-Party Cryptocurrency Securities,” which some interpret as a positive sign for Ripple.
On a market analysis noteSingapore-based cryptocurrency trading desk QCP Capital wrote that while election headlines continue to dominate, several crucial macroeconomic events loom on the horizon.
“Election headlines will continue to be a key focus, but several key macroeconomic events are also on the horizon. Key events starting with the FOMC meeting on Wednesday, megacap tech earnings (Apple, Amazon, Meta) throughout the week, and unemployment data on Friday,” QCP Capital wrote.
Edited by Stacy Elliott.
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