The bull market of 2024 has lost steam. Bitcoin’s price, which was initially pushed up by ETF flow and the momentum surrounding its halving, has been slowly retreating since it briefly reached a new all-time high in March this year. Altcoins are mostly experiencing a depressing market in 2024. Except for a brief memecoin frenzy, the prices of most projects have steadily declined since early in the year. The market is slowing down. This is especially visible in the lower trading volume. BTCUSDT, the most liquid pair, regularly has days where volumes are less than $10 Billion. Earlier this year, the amount traded was 3-4 times higher.
The upcoming release of 142,000 Bitcoins, or approximately $8.6 Billion, by Mt. Gox could bring more downside. The Trustees of Mt. Gox, the exchange that was hacked back in 2014, have announced repayments will begin in July of this year. This long-awaited event is set to provide market participants with capital at a 100x rate of return. Bitcoin’s price was just under $500 when the exchange collapsed. Customers will receive a refund in kind, so early Bitcoin purchasers are set to get a big payout.
The number of claims sold to professional funds is an unknown factor in this case. Many users did not expect a return of their Bitcoins and sold Mt. Gox claims to funds at big discounts. These funds are likely to look for significant gains in order to satisfy their investors. Bitcoin Cash will be distributed to holders, too. This Bitcoin-based spinoff, known as a ‘fork’, was launched in November 2017. Each Bitcoin owner received an equal amount of Bitcoin Cash. When Mt. Gox repayments start, BCH will be hit the hardest, as many Bitcoin 2014 holders see it as a “free gift”.
To add insult to injury, this summer lull is the time when the US and German governments choose to sell down Bitcoin proceeds confiscated from criminals. The German authorities’ Bitcoin activities trace back to a massive seizure of nearly 50,000 BTC, worth around $3 billion, from the illegal film piracy site Movie2k in January. Meanwhile, the US government moved over $240 million worth of seized Bitcoin to Coinbase.
A victim of this market could be the Ethereum ETF. The launch of the Bitcoin ETF in January was a subject of speculation: will it be a ‘sell the news’ event? Bitcoin certainly proved to be an exception and the price rally took off. The question is raised again for Ethereum. Bitcoin is familiar to many professional investors as digital gold. Ethereum’s claim to be the ‘world’s settlement layer,’ is less obvious to people outside of the crypto industry. If the ETF launch remains below expectations, crypto markets could be facing a painful, slow summer.
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