Bitcoin Falls Below $60K: Unfortunate news for Bitcoin in June: After appearing poised to break the previous all-time high of around $73,000 earlier in the month, the cryptocurrency’s price temporarily fell below the $60,000 barrier on Monday. The latest bad news for Bitcoin is that the former customers of the now-defunct Mt. Gox bitcoin exchange will soon be receiving their money, which could mean as much as 140,000 bitcoins hitting the market.
But there was some good news for crypto last week: the SEC dropped all charges after concluding its investigation into blockchain technology company Consensys and Ethereum. Also, Hashdex, a crypto asset management, has applied to launch a diversified spot crypto exchange-traded fund (ETF).
Mt. Gox Repayment Plan Causes Bitcoin Jitters
July will mark the beginning of the long-awaited process of returning money to clients of the now-defunct bitcoin exchange Mt. Gox. The exchange filed for bankruptcy more than a decade ago in response to many hacking events. It is still unclear how many bitcoins would be given, although estimates put the number between 65,000 and 140,000, with a possible worth of $9 billion.
Others contend that the supposed selling pressure is exaggerated, pointing out that creditors have had plenty of time to sell their claims if they needed cash quickly, while yet others are concerned that the flood of these bitcoins could drive prices down. The price of bitcoin temporarily fell below $60,000 on Monday, continuing its monthly downward trend, due to the notification of the upcoming repayments from Mt. Gox.
Data from Farside Investors shows that investors have pulled $1.1 billion out of spot bitcoin ETFs over the past two weeks, the biggest two-week period since U.S. spot bitcoin ETFs were allowed in January.1
SEC Closes Ethereum 2.0 Investigation
The SEC’s enforcement division has concluded its investigation into Ethereum 2.0.2, according to Consensys, a blockchain technology company. However, the regulator’s position on whether ether, the native token of the Ethereum blockchain, qualifies as a security is still unclear. The SEC started its investigation into Ethereum last year, and Consensys sued the SEC early this year, arguing that Ether was a commodity and that the SEC did not have the authority to investigate.
Even though Gary Gensler, chair of the SEC, has not officially classified ether as a security, the CFTC does. It is unclear what the SEC will do next, but the conclusion of the probe may show that it is leaning toward categorizing ether as a commodity.
Fortune reports that despite the announcement, Consensys’s legal battle with the SEC will go on.3The dispute began when the SEC investigated MetaMask, a cryptocurrency wallet controlled by Consensys, for how it allowed users to stake their tokens and switch them out for other ones. The SEC compares these practices to unlicensed brokerage trading in unregistered crypto assets. Although Consensys recognizes that the Ethereum 2.0 probe is ended, they believe this does little to address regulatory concerns.
Hashdex Files for Combined Bitcoin-Ether ETF
The next logical step, given the current state of spot bitcoin ETFs in the US and the imminent arrival of spot ether ETFs, might be the creation of a combination ETF that incorporates both of these prominent cryptocurrencies. The latest application for the Hashdex Nasdaq Crypto Index US ETF by crypto asset manager Hashdex is at the forefront of this endeavor.4
If approved, it would be the first U.S. ETF to own Bitcoin and ether. Bitcoin Falls Below $60K: Nasdaq claimed in its SEC filing that the ETF will track the market cap-weighted Nasdaq Crypto Index.). Custodian services will be provided by BitGo and Coinbase Custody. By providing exposure to the market’s overall performance, the ETF aspires to give investors a passive investment approach. In Brazil, Hashdex offers a comparable product.5
Although bitcoin and ether will be the primary focus of the new ETF at launch, the application does allow for the potential inclusion of other crypto assets subject to regulatory approval. According to James Seyffart, an analyst at Bloomberg, the SEC is likely to make a final decision about Hashdex’s application by early March 2025.6
What To Expect in the Markets This Week
In light of the impending Mt. Gox distributions and the significant bitcoin ETF outflows, crypto market watchers will be keeping a careful eye on the bitcoin price this week for indications that the bleeding may stop. Nonetheless, there are market analysts who, like Caitlin Long, founder and chief executive officer of Custodia Bank, argue that the recent halving event makes the bitcoin price decrease irrelevant. “It’s normal for a price dip like this to happen after a halving—halvings are incredibly bullish, but bull markets don’t start until typically several months later—for fundamental reasons,” X.7 wrote.
While discussions concerning cryptocurrencies gain traction on the campaign trail, all eyes are now on Thursday’s US presidential debate between Donald Trump and Joe Biden. It would appear that former President Trump has reversed his position on Bitcoin, lending his apparent support to the cryptocurrency without offering any firm remarks on digital assets’ regulation or policy. His campaign is attempting to distance President Biden from the perception that he is unfriendly to crypto due to the SEC’s harsh enforcement activities while in office, but they have offered no concrete crypto policy proposals.
