CryptoWorld reports:
Cryptocurrency Plunge
On July 5th, the cryptocurrency market experienced significant sell-offs, with Bitcoin marking its fourth consecutive trading day decline to its lowest levels since February. This stands in stark contrast to recent record highs in global stock markets.
Bitcoin briefly fell below $54,000 per coin, marking a 7% intraday drop; Ethereum saw a decline exceeding 6%. Smaller coins like Ripple and Dogecoin suffered even more, with some plummeting over 10%.
According to Coinglass data, over the past 24 hours, the cryptocurrency market saw over 230,000 liquidations, totaling $679 million.
Behind the Decline
Market analysis attributes the sharp cryptocurrency market downturn to several factors:
Firstly, reduced demand for U.S. Bitcoin Exchange-Traded Funds (ETFs). The fervor surrounding U.S. Bitcoin ETFs drove Bitcoin to a record high of nearly $74,000 in March, but diminished bets on Fed rate cuts dampened demand for high-risk investments, resulting in significant fund outflows.
Secondly, government actions involving seized Bitcoins. According to Bitcoin Magazine, the German government transferred a portion of its substantial Bitcoin reserves to exchanges. The Federal Criminal Police Office (BKA) moved Bitcoins worth approximately $75 million across platforms like Coinbase, Kraken, and Bitstamp on July 4th. Since mid-June, Germany has shifted around $315 million worth of Bitcoins to various platforms, including a hefty sale of over $390 million in Bitcoins seized in 2013.
Thirdly, concerns over the imminent return of Bitcoins from Mt. Gox’s restitution to creditors. The bankrupt exchange Mt. Gox is set to commence Bitcoin repayments to creditors in July 2024, potentially injecting a significant supply into the market, estimated between 65,000 to 140,000 Bitcoins, valued at nearly $9 billion at current prices.
Market commentators express apprehensions about the large quantities of Bitcoins that could flood the market once Mt. Gox creditors sell their holdings, assets that have been locked up for over a decade.
South Korea Launches New Crypto Monitoring System
The Financial Supervisory Service (FSS) of South Korea has developed a “continuous monitoring system” for suspicious cryptocurrency transactions to help authorities identify irregular activities. In a notification on July 4th, the regulatory agency announced the system’s establishment, scheduled to go live on July 19th, coinciding with the enforcement of the Virtual Asset Protection Act in South Korea.
FSS stated that major cryptocurrency exchanges under legal obligations have implemented systems enabling regulatory scrutiny of suspicious transactions, covering 99.9% of the country’s cryptocurrency trading volume.
Currently, 29 cryptocurrency exchanges are registered with the FSS, subjecting them to monitoring under the Virtual Asset User Protection Act.