Bitcoin in Focus: A scathing assessment from a seasoned fund manager
America's Fourth of July barbecues were ablaze, but Bitcoin was burning differently, falling to its lowest level in months.
While markets were celebrating, the world's largest cryptocurrency took a major plunge, falling as much as 8.1%, trading at around $55,561 at last checks. This decline came at a time when stock markets were advancing, highlighting the volatility of the digital currency sector and the challenges it faces.
Market volatility
“The price range between $51,000 and $52,000 is crucial, as many bitcoin miners are close to breaking even to achieve profitability,” Li Shi, head of trading at Auros, a market-making and algorithmic trading firm, told Bloomberg.
Since its record high in March, Bitcoin has fallen about 25%, as momentum around U.S. exchange-traded funds investing directly in the token has faded, replaced by fears of prolonged high interest rates and political uncertainty.
Filter event
TheStreet Pro's Stephen Guilfoyle described Bitcoin's fall as a "liquidation event." “It appears that the sale occurred for a specific reason and not because Bitcoin and cryptocurrency enthusiasts lost confidence,” he explained.
On the other hand, bankrupt crypto exchange Mt. Gox, which was handling more than 70% of all Bitcoin buying and selling worldwide by early 2014, announced it would begin paying creditors in July, and that these payments would be in Bitcoin and Bitcoin Cash.
In Germany, authorities are preparing to sell about 50,000 bitcoins seized from cybercriminals. German MP and Bitcoin activist, Joanna Kotard, called on the government to stop selling Bitcoin and adopt it as a strategic reserve currency to protect it from risks in the traditional system.
The future of Bitcoin
According to a recent report from CCData, a cryptocurrency market data provider, “the first half of 2024 was among the most important periods in the industry’s history.” The report noted the US Securities and Exchange Commission's (SEC) approval of spot bitcoin exchange-traded funds, which had amassed more than $55 billion in net assets by June.
The report added that Bitcoin has not yet reached the peak of the current appreciation cycle and is likely to reach an all-time high. The influx of institutional capital is expected to attract retail investors who have been frustrated by market declines and high-profile collapses like FTX and Terra.
Robinhood, known for its trading platform, is seeking to acquire the Bitstamp exchange, which would give it licenses to trade cryptocurrency futures and enable it to launch Bitcoin and Ethereum futures contracts in America. This represents a positive step towards the maturity of these assets as a viable investment alternative.
Ultimately, it is clear that Bitcoin faces challenges and fluctuations, but it continues to attract attention and investment from major institutions, indicating a potential future full of opportunities and transformations.
