CoinDesk Report:
In the past 24 hours, the cryptocurrency market has experienced significant volatility. According to Financial Markets data from Eying, Bitcoin dropped from over $60,000 and briefly fell below the $54,000 mark.
Bitcoin plunged $6,000 in 24 hours.
As of the report issued on July 5th, Bitcoin was trading at $54,206.2 per coin, marking a decrease of over 8%.
Other cryptocurrencies in the virtual currency market also saw substantial declines. Ethereum fell by over 11%, while Dogecoin dropped more than 16%.
According to CoinGlass data, over the past 24 hours, more than 230,000 individuals in the cryptocurrency market were liquidated, totaling approximately $680 million (approximately RMB 4.9 billion). The largest liquidation occurred in Ethereum.
According to China Securities Journal,
The recent flash crash of cryptocurrencies was triggered by the disappointment over market rumors regarding the start of trading for an Ethereum spot ETF on July 4th.
CryptoQuant data indicates that during this downturn, Bitcoin worth $2.4 billion with a holding period of 3 to 6 months was moved. Analyst Cauê Oliveira pointed out that this suggests a collective sell-off by investors who bought Bitcoin earlier in the year, primarily speculators betting on the positive effects of Bitcoin halving.
Additionally, the latest minutes from the Federal Reserve’s monetary policy meeting indicate that most officials still believe more data on declining inflation is needed before considering a rate cut.
According to Securities Times, analysts also believe that recent actions by Binance, the world’s largest cryptocurrency exchange, may have affected market sentiment. Binance will cease trading services for six currency pairs: BTC/AEUR, ETH/AEUR, AI/TUSD, CHR/BNB, GAS/FDUSD, and LQTY/FDUSD, with revisions effective from July 5th. The company did not disclose specific reasons for delisting but reminded that it regularly reviews all listed spot trading pairs and may remove some due to poor liquidity or other factors.
Meanwhile, Binance has recently added new trading pairs on its platform. WIF/BRL, ZK/USDC, and ZRO/USDC have been included in Binance Spot. It is worth noting that this service is not available to all customers. Currently, users residing in Canada, Cuba, Crimea region, Iran, Netherlands, North Korea, Syria, the United States and its territories (American Samoa, Guam, Puerto Rico, Northern Mariana Islands, U.S. Virgin Islands), and any non-government-controlled areas of Ukraine cannot trade the aforementioned spot trading pairs.
Since the beginning of the year, the exchange has implemented several similar changes. Last month, it halted trading services for ALPACA/BTC, NFP/TUSD, MDX/BTC, QUICK/BTC, and XAI/BNB. Several months ago, Binance terminated all operations involving Monero (XMR), resulting in a sharp decline in the price of this popular privacy coin.
Recent increases in cryptocurrency market supply have also been substantial. Public data shows that in July, five new cryptocurrencies will be available for investment: 5thScape (5SCAPE), DarkLume (DLUME), Smoke (SMOG), PlayDoge, and Pepe (PEPE).
Image source: Visual China
Additionally, according to China Securities Journal,
The recent downturn in Bitcoin is primarily attributed to large-scale sell-offs by cryptocurrency mining companies facing a drastic drop in revenue.
IntoTheBlock data shows that the amount of Bitcoin held by miners has dropped to the lowest level in 14 years. Miners sold over $2 billion worth of Bitcoin in June, the highest in over a year.
Since the Bitcoin mining reward halving event in April, revenues for Bitcoin miners have significantly decreased. Bitcoin miners’ income primarily comes from mining rewards and transaction fees. The halving event directly affected mining rewards, while operational costs such as electricity and equipment expenses remained unchanged. Therefore, many miners may face profitability challenges.
Recently, due to many miners ceasing operations, Bitcoin mining difficulty has sharply declined. The latest Bitcoin hash rate has dropped from 8.8 trillion to 8.3 trillion. Despite the decrease in mining difficulty, the impact of the halving event has caused Bitcoin miners’ income over the past two months to hit a historical low. Kaiko data shows that total miner income dropped from an average of $107 million per day before the halving to $30 million.
One miner stated that the shipment volume and business revenue of mining machine manufacturers have been greatly affected as cryptocurrency prices plummet.
F2Pool data shows that with Bitcoin’s trading price falling below $58,000, inefficient miners such as Antminer S19, Whatsminer M30S+, and Whatsminer M33S+ are facing challenges under current market conditions. Calculating at $0.06 per kWh, these Bitcoin miners are operating at a loss as soon as they turn on.
Image source: f2pool
Daily Economic News compiled from Securities Times and China Securities Journal