Bitcoin Dips Below $60,000: Future Trajectory Remains Unpredictable
The global cryptocurrency market is experiencing significant turbulence once again.
On June 25, Bitcoin’s value against the US dollar plummeted, briefly falling below the $60,000 mark. Within just 24 hours, it dropped approximately 7%, marking the first time Bitcoin has fallen below $60,000 since early May. As of this writing, Bitcoin’s price hovers around $60,776.5.
Although cryptocurrency prices are known for their volatility, this recent adjustment has exceeded market expectations, leading to substantial losses for many leveraged speculators. Reports indicate that tens of thousands of positions were liquidated within the past 24 hours alone.
It is worth noting that NVIDIA, a leading AI stock in the US market, experienced a three-day consecutive decline, falling over 12% in total and reducing its market cap below $3 trillion. The correlation between Bitcoin and tech stocks has once again drawn global investor attention.
Regarding the current Bitcoin decline, Ilan Solot, a senior global market strategist at a London financial firm, pointed out that Germany’s sale of Bitcoin confiscated from criminal activities and the impending repayment of Bitcoin to creditors by the defunct Mt. Gox exchange might increase market supply pressure.
Mt. Gox, which suffered multiple hacking attacks between 2011 and 2014, eventually collapsed in 2014 due to the loss of a significant amount of Bitcoin. After nearly a decade, Mt. Gox is set to return Bitcoin to its clients starting in July 2024, with the amount potentially ranging between 65,000 and 140,000 Bitcoins. At current prices, this could be worth over $8 billion, casting a shadow over the market’s trajectory.
Additionally, reports indicate that the recent selling pressure on Bitcoin partially stems from cryptocurrency mining companies selling Bitcoin due to plummeting revenues. Since the Bitcoin halving event in April, miners’ earnings have been halved, prompting mining companies to accelerate Bitcoin sales to cover costs, further increasing supply and driving the downward trend.
Some analysts believe that beyond the risk of increased supply, the deeper reason for Bitcoin’s adjustment might be investors reassessing the appeal of cryptocurrencies relative to other investment assets. Moreover, continued pessimism among traders about the number of interest rate cuts by the Federal Reserve may also be affecting cryptocurrency market sentiment.
Regardless of the varying reasons behind it, the previously fervent “bullish sentiment” in the Bitcoin market has cooled to some extent. Reports indicate that global trading volume has hit a recent low since the launch of the US Bitcoin ETF in January, with funds continuing to flow out.
In the Hong Kong market, virtual and digital currency stocks, as well as Bitcoin ETFs, have experienced varying degrees of decline. On June 25, concept stocks such as OSL Group (00863.HK) plunged 13.39%, New Fire Technology Holdings (01611.HK) dropped 9.62%, and Meitu (01357.HK) fell 3.37%. ETFs also saw declines, with the Bosera Bitcoin ETF (03008.HK) down 2.87%, ChinaAMC Bitcoin ETF (03042.HK) down 2.75%, and the E Fund Bitcoin ETF (03439.HK) down 2.87%.
