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Cryptocurrencies Tumble on First Day of Ether ETFs as Mt. Gox Shifts More Bitcoin to Creditors
People walk past a neon sign advertising a Bitcoin and Ethereum cryptocurrency exchange in Warsaw, Poland, on May 19, 2024.
Jaap Arriens | Scene photos | Getty Images
Bitcoin led the cryptocurrency market lower on Tuesday, the first day of trading for ether ETFs, as Mt. Gox transferred more bitcoin to creditors and investors took profits after the cryptocurrency’s best week since March.
According to Coin Metrics, the latest drop in the price of bitcoin was 3%, settling at $65,891.50. Etherfell less than 1% to $3,476.04. Investors and analysts attributed the moves to profit-taking following last week’s gains of 22.85% and 12.75%, respectively.
Additionally, Bitcoin network activity shows that Mt. Gox moved approximately 5,000 bitcoins off the exchange, likely as part of the creditor repayment process It began this month. The exchange, which went bankrupt after a major hack 10 years ago, has until October to return more than 140,000 bitcoin to victims of the event.
The market is expected to absorb the negative impact, thanks to long-term optimism about the success of ether ETFs and the US presidential election.
“We are aligned with the market consensus that immediate adoption here it will probably be relatively slow and modest compared to bitcoin ETF adoption,” said Devin Ryan, an analyst at JMP Securities. “Part of that is that bitcoin ETF adoption is in its infancy: A lot of the biggest pools of money for that ETF haven’t been activated yet,” he added.
In the meantime, however, ether could be volatile, according to Nexo co-founder Antoni Trenchev. He pointed to the launch of bitcoin ETFs in January, when bitcoin surged before falling 20% and then advancing to another new high.
“Just like the Bitcoin ETF, it will take some time for inflows into the ETH ETF to create a supply shock that will significantly move markets,” said Ben Kurland, CEO of cryptocurrency research platform DYOR.
Furthermore, he added, the President’s decision Joe Biden TO to withdraw of the presidential race introduces uncertainty into the market.
“Investors [are] pending more concrete developments on the matter [Vice President Kamala] Harrishis stance on cryptocurrencies and the likelihood of him regaining ground in the polls,” he said.
Trenchev shared this sentiment.
“Bitcoin’s decline from recent highs reflects the sudden arrival of Kamala Harris in the U.S. presidential election, adding uncertainty to a race that seemed tilted in favor of Donald Trump and its new pro-crypto stance,” he said.