The flagship cryptocurrency Bitcoin experienced a 1.8% drop in market dominance, marking the largest daily loss in the last six months. This decline is attributed to investors shifting from Bitcoin to other cryptocurrencies. Consequently, Bitcoin’s price also fell by 5%, dropping below the $59,000 level.
Concerns Over Mt. Gox Repayments and Excess Supply
The bankrupt cryptocurrency exchange Mt. Gox announced it would distribute a total of 140,000 BTC to hack victims starting in July, causing a significant market impact. The possibility of recipients selling these payments led to concerns about an increase in Bitcoin supply and market oversupply. These concerns were further reinforced by increased sales from miners and outflows from ETFs.
Market concerns manifested as increased demand for short-term Bitcoin put options on the Deribit exchange. Investors turned to put options to protect their assets against potential price drops, driving this demand. This situation highlighted the strength of price drop expectations among investors.
The Real Impact of Mt. Gox Repayments
Some market observers believe the impact of Mt. Gox repayments on the market is exaggerated. According to Tagus Capital, the exact amount of Bitcoin to be distributed is not clearly defined. Additionally, it is noted that long-term investors may not sell these payments immediately. Factors like capital gains tax are also highlighted as potential influences on sales.
In the upcoming period, the market is curious about how general economic conditions, in addition to Mt. Gox repayments, will affect Bitcoin prices. Geopolitical tensions have also inevitably started to show their impact. At the time of writing, the cryptocurrency Bitcoin showed significant recovery after yesterday’s drop. Yesterday, Bitcoin’s price fell to $58,402 on the cryptocurrency exchange Binance, but at the time of writing, it was trading at $60,841.
Investors who viewed the drop in Bitcoin’s price as a buying opportunity offered advice. One such figure, Robert Kiyosaki, recommended buying and holding Bitcoin for the long term.
