News
Why the price of bitcoin is falling
Bitcoin has been plagued by multiple selling pressure factors. (REUTERS/Reuters)
Bitcoin fell to an all-time low since May 2, after a series of selling pressures took a toll on the world’s largest digital asset by market capitalization. Bitcoin (BTC-USD) traded unchanged over the past day to change hands at $60,871 (£48,122) on Thursday, according to CoinGecko data.
To know more: Real-time cryptocurrency prices
The leading cryptocurrency in terms of market value has fallen by more than 10% this month. However, it remains significantly higher when we look at its performance over the last year, having increased by around 100% over the last 12 months. Despite this, it is still down more than 17% from its record high of $73,798 in mid-March.
Other cryptographic tokens, such as ether (ETH-USD) and solana (SOL-USD), according to Coingecko in the last 24 hours have decreased by 0.6% and 0.2% respectively data.
The digital asset failed to correlate with stock indexes, which remained higher this week. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) closed higher at the end of trading on Wednesday.
Bitcoin AND plagued by multiple selling pressure factors
Over the past week, several factors have emerged that have increased the selling pressure on bitcoin. Notably, the trustee of Mt. Gox announced that creditors of the defunct exchange will begin receiving refunds totaling approximately 142,000 bitcoins, worth nearly $9 billion, starting in July.
To know more: Bitcoin Price Drops Ahead of FTX and Mt Gox Bankruptcy Payments
Investors remain cautious about the possibility that Mt.Gox creditors could begin dumping their newly redeployed bitcoins on exchanges after waiting more than a decade to receive them.
US and German governments send seized bitcoins to exchanges
Another selling pressure point has emerged, as according to data from Arkham Intelligence, the US government recently sent 3,940 bitcoins to cryptocurrency exchange Coinbase. Data indicates that bitcoin was seized in early 2024 from Banmeet Singh, a convicted drug dealer.
To know more: What are bitcoin rune carvings?
The story continues
As part of Singh’s January sentencing, he was forced to surrender more than 8,100 bitcoins to U.S. authorities. The U.S. Drug Enforcement Agency called the bitcoin seizure the agency’s largest ever cryptocurrency seizure.
Also on Tuesday, an analysis by Arkham Intelligence showed that the German government recently transferred $24 million in seized bitcoin to cryptocurrency exchanges Kraken and Coinbase.
These bitcoin transfers originated from a wallet linked to the German Federal Criminal Police Office (BKA) and may be linked to the BKA’s seizure of nearly 50,000 bitcoins in 2013 from a movie piracy website.
To know more: What are bitcoin ETNs?
Arkham Intelligence data indicates that these transfers follow previous movements of $195 million in bitcoin to trades last week. In total, over $425 million has moved from the wallet associated with BKA in the past week.
Transfers to exchanges could signal an intent to liquidate some assets, potentially further increasing downward pressure on the digital asset.
Demand for spot bitcoin ETFs resumes
In contrast to the multiple factors contributing to the selling pressure, institutional investor demand for US-based spot bitcoin exchange traded funds (ETFs) is starting to pick up after a period of declining interest.
Spot bitcoin ETFs saw net inflows of $21.52 million on Wednesday, continuing a positive trend that began on Tuesday.
To know more: What is a bitcoin spot ETF and why has it triggered a cryptocurrency rally?
The largest net inflows from spot bitcoin ETF products on Wednesday came from Fidelity’s FBTC, which saw $19 million, according to data from SoSoValue. Grayscale’s GBTC exchange traded fund reported net inflows of $4 million, its first positive flow since June 5. VanEck also recorded inflows of $3 million on the same day.
Watch: What the debut of Bitcoin ETNs on the London Stock Exchange means for the European cryptocurrency market
Download the Yahoo Finance app, available for Apple AND Android.