Key Points
- Bitcoin’s price dipped below $68,000 after a $9.6 billion transfer from a Mt. Gox cold wallet.
- The broader trend for Bitcoin is still expected to be upward despite temporary “supply anxiety”.
Bitcoin Price Drop Following Major Transfer
The value of Bitcoin experienced a dip, dropping below $68,000. This followed a substantial transfer from a Mt. Gox cold wallet, reportedly amounting to at least $9.6 billion.
In the last 24 hours, Bitcoin’s price has fallen by over 1.5% and was trading at $67,818 at 10:17 a.m. ET. Meanwhile, the GM 30 Index, which represents a selection of the top 30 cryptocurrencies, saw a rise of 1.42% to 145.45 during the same period.
Anticipated Upward Trend Despite Temporary Setback
Despite this drop, analysts from QCP Capital suggest that this sudden “supply anxiety” is likely just a minor setback in a larger upward trend expected towards the end of the year.
The QCP Capital report outlined three reasons to remain optimistic about Bitcoin’s performance in the medium to long term. These include stronger equity markets led by entities like Nvidia, unprecedented political support for crypto in the U.S., and anticipated strong demand for the Ethereum spot exchange-traded fund (ETF) once it starts trading.
Joshua Lim, co-founder of Arbelos Markets, suggested that the major creditors of the now-defunct Mt. Gox exchange are experienced investment firms specializing in distressed debt. These firms likely use hedging strategies to manage the risks associated with their claims.
He further added that an expected increase in cryptocurrency supply from the Mt. Gox creditor payouts and the FTX estate could temper a market upswing in the medium term. This could result in a less volatile market that will trade within a narrow range over the summer.
According to Lim, the market is likely to be more sedate this summer due to the supply from Mt. Gox and the FTX estate and overhang from SEC enforcement actions.
