Cryptocurrency - Fear of a supply glut: Bitcoin below 58,000 dollars
The Bitcoin value has significantly decreased. The price of the digital asset Bitcoin on the Bitstamp platform was still above the $60,000 US-Dollar mark at late Wednesday evening, but then lost approximately 5% within the next twelve hours. Today at noon, the price recovered slightly but remained below the $58,000 Dollar threshold.
Analysts attributed the price drop mainly to a statement from the bankruptcy trustee of the failed cryptocurrency exchange Mt.Gox. He had announced that a large number of Bitcoin tokens (BTC) would be returned to affected creditors. The affected parties have been waiting for years for a refund of their coins.
Unclear is how former Mt.Gox customers will behave now. If a significant portion of them want to sell the rescued Bitcoin balances in the short term, this could lead to an oversupply of Bitcoin on the market. Market observers from Glassnode have not yet recorded any significant BTC transfers.
The fear of an oversupply of Bitcoin on the market is also fueled by the fact that law enforcement agencies are sitting on large Bitcoin balances that they have secured from criminals. For example, the Saxony Criminal Police Office seized around 50,000 Bitcoin in the context of investigations against the illegal film exchange Movie2k.to in January. The Federal Criminal Police Office (BKA) is also reported to regularly convert confiscated BTC balances into classical currencies like Euro or Dollars.
The overall negative mood on the crypto market is also related to the US Federal Reserve. It is currently unclear when and to what extent the Fed will ease its monetary policy. The calculation is: As long as interest rates are relatively high, investors have many options to invest their money profitably. In this case, the crypto market suffers. If interest rates for traditional investments decrease, crypto investments become more attractive.
Mt.Gox Announcement
- The decreasing Bitcoin value could be exacerbated if a significant number of affected Mt.Gox creditors decide to sell their rescued Bitcoin, which is information technology, due to the large number of Bitcoin tokens being returned.
- The price drop of Bitcoin on the market might also be influenced by the large amounts of Bitcoin currency held by international law enforcement agencies, such as the Saxony Criminal Police Office and the Federal Criminal Police Office (BKA), which are often converted into classical currencies like the US dollar.
- The crypto market has been negatively impacted by the uncertainty surrounding the US Federal Reserve's monetary policy, with higher interest rates making traditional investments more appealing and reducing demand for cryptocurrencies like Bitcoin.
- Analysts believe that the return of a large number of Bitcoin tokens from the bankrupt Mt.Gox exchange could contribute to an oversupply of Cryptocurrency in the market, potentially increasing the pressure on its value.
- With the recent turmoil in the crypto market and the potential impact of the Mt.Gox announcement on Bitcoin's price, investors should closely monitor information technology trends in the industry, including developments in Crypto and Internet-based currencies.
