Flat at $64k: Mt. Gox and US Politics Insights

Bitcoin experienced a slight decline on Friday as the recent surge in cryptocurrency markets lost momentum, with attention shifting towards distributions from the defunct Mt. Gox exchange and updates on U.S. regulatory developments.

This week, Bitcoin saw a notable rebound, driven by speculation that a potential Donald Trump presidency could lead to a more favorable regulatory environment for cryptocurrencies, as he has emphasized pro-crypto regulation in his reelection campaign.

This optimism helped alleviate concerns about the selling pressure stemming from Mt. Gox, which has begun distributing billions of dollars in Bitcoin to creditors following a hack in 2014.

By 09:24 ET (13:24 GMT), Bitcoin had dropped 0.9% to $64,296.7, although it remained up 8.5% over the past week.

The cryptocurrency market also faced pressure from ongoing worries about Mt. Gox distributions, particularly as wallets associated with the exchange were noted to be moving nearly $3 billion worth of Bitcoin recently. The fear of an increased supply of Bitcoin due to these distributions had already led to significant losses earlier in July, but the price has since rebounded. However, there is still uncertainty about the overall scale and impact of Mt. Gox’s distributions, with traders speculating that recipients might be more likely to sell given Bitcoin’s substantial gains over the last decade, creating significant selling pressure.

In the broader crypto market, many major altcoins also retreated as momentum slowed down. Nevertheless, losses were somewhat mitigated by speculation surrounding potential approvals for spot exchange-traded funds (ETFs) in the U.S.

For instance, Ether fell 2.5% to $3,397.9 amid reports that the Securities and Exchange Commission might approve a spot Ether ETF soon. Conversely, Solana rose 1% with news of a possible spot Solana ETF in progress. Other cryptocurrencies, such as Cardano and Dogecoin, declined by 4.7% and 4.5%, respectively.

In related news, the North Korea-linked hacker responsible for extracting $230 million from the Indian crypto exchange WazirX has reportedly converted most of the stolen assets into Ether. As of Friday morning, the hacker was said to hold over 59,097 ETH, valued at around $200 million, along with an additional $15 million in various alternative cryptocurrencies.

By Friday, nearly all tokens listed on WazirX were trading at notable discounts compared to their prices on global and local exchanges, reflecting poor liquidity and heightened selling pressure. The Bitcoin/rupee trading pair had plummeted 22% in the last 24 hours, starkly contrasting the 2% drop seen on other local platforms. The SHIB/rupee pair also fell significantly, down 30%.

WazirX recently experienced a security breach in one of its multisig wallets, leading to the loss of more than $100 million in SHIB and $52 million in ETH. This setback represented over 45% of the exchange’s total reserves as reported in June 2024, which has severely dampened user confidence in potential recovery efforts.