The Two Reasons Bitcoin’s Price Is Declining: Bitwise
Bitcoin’s price has been experiencing significant drops recently, resulting in over $300 million in crypto market liquidations in just one day. Analysts at Bitwise have identified two main drivers behind this sudden volatility, neither of which are related to Bitcoin ETFs.
According to Gayatri Choudhury, a Quantitative Research Analyst at Bitwise, the first contributing factor is the selling behavior of Bitcoin miners. This group, often overlooked by market observers, has been consistently selling their BTC since the fourth Bitcoin halving in April. With lower revenues and increased competition from global counterparts, miners have been facing challenging conditions. On June 9, Choudhury noted that over 3,000 BTC were transferred from mining pools to Binance, marking the highest level in two months. Similar selloffs in the past have been associated with downward price movements, such as those witnessed immediately after the halving or in late May. Additionally, miners have been selling large volumes of BTC through over-the-counter desks, with 1,200 BTC sold in a single day in June.
The second reason for the decline in Bitcoin’s price stems from concerns related to Mt. Gox. The exchange, which has been inactive for a decade, announced that it would be repaying customers their long-lost Bitcoin in July. With over 141,000 BTC worth more than $8.5 billion, investors are worried about a potential influx of selling pressure on the market.
Despite the current challenging market conditions, Choudhury reminds investors of Bitcoin’s past performance. Just a year ago, Bitcoin was trading at $30,000, and a year before that, it was at $10,000. She encourages investors to keep this in mind and highlights the upcoming launch of Ethereum ETFs in the United States as an event to look forward to. Analysts at K33 Research predict that these ETFs could attract $4 billion within their first five months on the market.