Blockchain
Bitcoin briefly slips below $60,000, SEC drops Ethereum probe
Key points
- The price of bitcoin continued its month of suffering, as the price briefly dipped below $60,000 on Monday.
- Former bitcoin exchange Mt. Gox has announced that distribution of funds owed to former customers will begin in early July.
- The Securities and Exchange Commission (SEC) has closed its investigation into Ethereum without filing charges against blockchain technology company Consensys.
- Crypto asset manager Hashdex has filed for a combined bitcoin-ether spot ETF.
- This week, analysts will be watching to see if bitcoin can halt its decline, while also keeping an eye on Thursday’s US presidential debate.
June has not been kind to Bitcoin: The cryptocurrency’s price briefly slipped below the $60,000 level on Monday, after it looked like it might surpass the previous all-time high of more than $73,000 earlier in the month.
The most recent negative news for Bitcoin comes in the form of an arrival distribution of bitcoin due to former customers of the defunct bitcoin exchange Mount Goxwhich is estimated to involve the placing on the market of as many as 140,000 bitcoins.
That said, last week wasn’t all bad news for cryptocurrencies, as the U.S. Securities and Exchange Commission (SEC) concluded its investigation into Ethereum and blockchain technology company Consensys without filing any charges. Additionally, crypto asset manager Hashdex has filed for a spot cryptocurrency exchange-traded fund (ETF) which will focus on diversification.
Mt. Gox Refund Plan Causes Jitters in Bitcoin
Defunct bitcoin exchange Mt. Gox has announced that it will begin the long-awaited process of returning assets to its customers in July, more than a decade after filing for bankruptcy following numerous hacking incidents. The total amount of bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 bitcoin, potentially valued at up to $9 billion.
While some investors worry that the influx of these bitcoins could depress prices, others argue that the potential selling pressure may be overstated, pointing out that creditors had years to sell their claims if they urgently needed funds. The announcement of Mt.Gox’s upcoming refunds caused the price of bitcoin to briefly dip below $60,000 on Monday, continuing its downward trend for the month.
According to data from Farside Investors, spot bitcoin ETFs suffered the largest outflows in a two-week period since spot bitcoin ETFs were approved in January, with investors taking out a net $1.1 billion from these funds in that period of time.
SEC closes investigation into Ethereum 2.0
On June 18th, blockchain Technology company Consensys announced that the SEC’s enforcement division has concluded its investigation into Ethereum 2.0. Despite the closure, the SEC’s position on the eventuality etherthe native token of the Ethereum blockchain, the title qualification remains ambiguous.
According to Consensys, the regulator began its investigation into Ethereum last year and the company sued the SEC earlier this year, arguing that Ether was a commodity and that the SEC had no jurisdiction to to investigate.
Although SEC Chairman Gary Gensler has not definitively labeled ether as a security, the Commodity Futures Trading Commission (CFTC) considers it a commodity. The closure of the investigation may indicate that the SEC tends to treat ether like a commodity, although the SEC’s future actions remain uncertain.
According to Fortune, Consensys’ legal battle with the SEC will continue despite the recent announcement. The conflict originally arose from the SEC’s control over the crypto wallet owned by Consensys MetaMask, particularly its token trading capabilities and access to staking. The SEC alleges that these functions constitute unlicensed brokerage activities involving unregistered cryptocurrency securities. Consensys indicated that while the closure of the Ethereum 2.0 investigation is a victory, it does not fully address the broader regulatory issues.
Hashdex file for the combined Bitcoin-Ether ETF
With bitcoin spot ETFs already trading in the US and Spot ether ETFs seem just around the corner, the next development could be a combined ETF with both major cryptocurrencies. Hashdex, a crypto asset manager, is leading this effort with a recent filing for the US Hashdex Nasdaq Crypto Index ETF.
If approved, this ETF would be the first in the United States to directly hold both bitcoin and ether. According to Nasdaq filings with the SEC, the ETF will track the market-cap-weighted Nasdaq Crypto Index (NCI). Coinbase Custody and BitGo will act as custodians. The ETF aims to provide a passive investment strategy, giving investors exposure to overall market performance. Hashdex already has a similar product in Brazil.
While the new ETF will initially focus on bitcoin and ether, the document leaves room for the inclusion of additional crypto assets in the future, provided they meet regulatory criteria. Bloomberg analyst James Seyffart noted that the SEC’s final decision on Hashdex’s filing is expected in early March 2025.
What to expect from the markets this week
Cryptocurrency market analysts will be watching the price of bitcoin closely this week, hoping for signs that the bleeding will stop, especially in the context of high bitcoin ETF outflows and upcoming Mt. Gox distributions.
However, some market observers, such as Custodia Bank founder and CEO Caitlin Long, say that the decline in bitcoin’s price is not something to worry about in the context of the recent halving event. “It is normal for a price drop like this to happen after a… halving“Halvings are incredibly bullish, but bull markets typically start several months later, for fundamental reasons,” Long wrote on X.
All eyes will now also be on Thursday’s US presidential debate between Joe Biden and Donald Trump, as conversations about cryptocurrencies find momentum in the wake of the election campaign.
Former President Trump has changed his stance on bitcoin, now seemingly supporting the cryptocurrency without making any definitive comments on regulatory or policy matters for digital assets. Due to the SEC’s aggressive enforcement actions during his administration, President Biden, by extension, has not been seen as a supporter of cryptocurrencies, an image his campaign is trying to disassociate from him, although there are no specifics on the cryptographic politics of that field, O.