Market Stays Flat at $57K Amid Mt. Gox Concerns, Ether Rises on ETF Optimism

Bitcoin Recovers Slightly Amid Supply Concerns; Ether Gains on ETF Speculation

Bitcoin’s price experienced a minor rebound from recent declines on Tuesday, although market sentiment remained cautious due to fears of an impending increase in token supply. In contrast, Ether surged sharply as speculation arose around the potential approval of a spot exchange-traded fund (ETF).

The leading cryptocurrency had been struggling for the past two weeks, hitting its lowest point in over four months last week. This decline was largely fueled by concerns regarding token distributions from the defunct crypto exchange Mt. Gox. Despite these issues, Bitcoin’s price appeared to have stabilized for the moment.

As of 08:32 ET (12:32 GMT), Bitcoin increased by 0.4% in the past 24 hours, reaching $57,386.4. Meanwhile, Ether outperformed Bitcoin with a 0.7% rise to $3,074.46.

Concerns Surrounding Mt. Gox Distributions

Bitcoin dropped to as low as $53,000 last week after Mt. Gox trustees announced the commencement of token distributions linked to a 2014 hack, though they did not disclose the total value of the tokens being distributed. This news prompted traders to sell Bitcoin, fearing that beneficiaries of the distribution might also offload their tokens, especially given Bitcoin’s substantial price appreciation over the past decade.

Notably, several significant Bitcoin "whale" wallets were observed selling off their holdings, and additional selling pressure arose from Bitcoin confiscated by the German government from a piracy website.

However, recent data indicating strong capital inflows into crypto investment products has somewhat improved market sentiment, suggesting a potential stabilization for Bitcoin.

Weekly Inflows into Crypto Assets Driven by Bargain Hunting

Data from a digital asset manager indicated that cryptocurrency investment products saw inflows totaling $441 million in the week leading up to July 8, driven mainly by bargain hunters amid fears of a token dump affecting crypto prices. Bitcoin remained dominant in attracting inflows, although other prominent altcoins also received investment, with Ether contributing approximately $10 million in inflows.

Mixed Performance Among Altcoins as Ether ETF Speculation Builds

The broader cryptocurrency market showed a mixed performance on Tuesday, despite the rebounds in Bitcoin and Ether. The Securities and Exchange Commission is anticipated to approve several major issuers’ filings for spot ETFs later this month, with some optimism reflected by a narrowing price discount between major exchanges.

While Ether displayed a recovery, the cryptocurrency market, in general, has been experiencing waning retail interest this year, as indicated by sluggish trading volumes in spot Bitcoin ETFs.

Several altcoins experienced losses, with specific tokens falling 1.5% and 1.2%, respectively. However, one asset increased by 0.4% following a filing by CBOE for approval to list spot Solana ETFs. Among meme tokens, two others decreased by 0.9% and 1.4%.

Continued Bitcoin Selling by German Government

The German government has been actively selling Bitcoin, moving an additional $339.2 million worth to centralized exchanges and market makers. Recent transactions included 800 bitcoins sent to the Kraken exchange, 5,000 bitcoins to market maker B2C2 Group, and nearly 107 bitcoins to Cumberland DRW. Furthermore, around 400 bitcoins were transferred to another undisclosed address.

On Tuesday, the government also received back 1,692 bitcoins (valued at $96.9 million) from the crypto exchange Bitstamp. This selling activity follows the seizure of 50,000 bitcoins from the film piracy site Movie2k earlier this year, which has spurred recent transfers to exchanges initiated last month. In a notable pattern, government-designated addresses transferred over 15,000 bitcoins (approximately $866 million) to known market maker addresses, while subsequently, over 3,600 bitcoins returned to the government from various exchanges.