Yonhap News
Bitcoin prices slumped below the $60,000 mark amid concerns about its oversupply overriding the market expectations on the U.S. Federal Reserve (Fed) interest rate cuts this year.
According to the global coin market platform CoinMarketCap, as of Thursday, Bitcoin (BTC) is being traded at $58,816.94, a 3.66% decrease from a day ago. In South Korea’s major cryptocurrency exchange, Bithumb, it is being traded at $74,000, a 2.20% drop from the previous day.
After falling below the $60,000 mark, it even hit the $59,000 range. It’s only been two months since bitcoin dropped to the $58,000 range on May 2. It recovered to the $70,000 mark in mid-May but hit the downward trend again.
The current price range represents about a 20.14% decline in Bitcoin prices compared to when it stormed to an all-time above $70,000 in March after the Securities and Exchange Commission approved the first U.S. Spot Bitcoin exchange-traded fund or ETF.
The latest price slumps come as concerns mount on the oversupply of bitcoins after Mt. Gox announced the start of a formal repayment procedure in early July.
Mt. Gox is expected to distribute around $9 billion worth of coins to users, which is anticipated to lead to some significant selling action.
Such concerns are overriding the good news that funds are flowing into the Spot Bitcoin ETF. In June, about $790 million of funds were invested into the Spot Bitcoin ETF.
Spencer Hallarn, Global Head of Virtual Asset at GSR, analyzed, “This downturn in virtual assets was triggered by the news of the Mt. Gox repayment and the massive altcoin unlock in the market.”
Currently, the potential amount of bitcoin supply to be poured out from the Mt. Gox bond repayment and the German government’s Bitcoin sale is known to be at least 145,641 BTC ($8.1 billion). If the German government proceeds with additional sales, the scale is expected to grow further.
According to Arkham, on June 27, 3,641 BTC were moved from the German government’s BTC wallet to crypto exchanges Kraken, Bitstamp, and Coinbase. If they were sold at the then price of $68,000, it would amount to about $248 million. Sending virtual assets to an exchange market is generally considered a potential selling signal.
