As every week, we summarize the last few days on the market. Sebastian Seliga, an analyst at the zondacrypto exchange, helps us with this.
Sebastian Seliga: the relegations are behind us
In recent days, we have been observing mostly red on the cryptocurrency market. Bitcoin fell to the level of USD 53,500. There has not been such a promotion in four months. Altcoins bled even more. What could be the consequences? Let us give the floor to the zondacrypto expert:
This is the fourth consecutive week that the cryptocurrency industry has seen declines. The total market capitalization has decreased from $2.28 trillion last Friday to $1.99 trillion, indicating a strengthening downtrend. Even flagship assets such as bitcoin and ether have fallen by 11.51% and 16.28%, respectively, over the past seven days. Dogecoin has seen the biggest decline among the leading cryptocurrencies, losing 24.16% over the same period.
But what are the reasons for the declines? According to Seliga, we can list the following factors:
- Regulation: Increased regulatory activity in various countries, including China and the United States, has created uncertainty in the market.
- Macroeconomics: Global economic turmoil has impacted investor appetite for risky assets.
- Technical Corrections: After a long period of growth, the cryptocurrency market naturally goes through a correction phase.
Mt. Gox
The Mt. Gox case deserves a separate paragraph, however. Sebastian Seliga believes that “one of the key events of this week was the start of Mt. Gox withdrawals.” He’s talking about the former market leader. The exchange collapsed in 2014, and on July 5, 2024, it was announced that its creditors – yes, after more than 10 years! – were starting to receive their bitcoins (and bitcoin cash units).
Creditors must meet several conditions before further payouts can be made, including verifying the authenticity of registered accounts and finalizing agreements with the cryptocurrency exchanges involved. Mt. Gox’s bankruptcy trustee stressed the need to ensure secure and verified transactions before further payouts can be made
– explains Seliga in an interview with us.
What numbers are we talking about?
So far, Mt. Gox has moved 47,228 bitcoins, worth about $2.71 billion, from the cold wallet to the new exchange wallet. Despite this significant move, there are still more than 147,687 bitcoins, worth $7.69 billion, left in the exchange’s reserves
– adds the zondacrypto expert.
Market reaction
As a result of all of the above, the market price of bitcoin fell to $53,500. This is the lowest price in four months. The price of bitcoin cash fell below $290.
German government moves
That’s not all. The German government also contributed to the declines. Over the past few weeks, it has transferred large amounts of BTC that it seized years ago from an illegal streaming portal to three major exchanges. This has caused concern among investors. There are many indications that the authorities of our western neighbor have also begun liquidating coins.
Analysis of blockchain data shows that the German government has distributed these BTC – they are going to major cryptocurrency exchanges – Bitstamp, Kraken and Coinbase. The moves are part of a broader trend that began on June 19, when authorities moved around 6,500 BTC, bringing the total value of funds moved to more than $425.49 million.
– explains Seliga.
Market reactions to German authorities’ actions
Recent transactions have had a noticeable impact on the cryptocurrency market, also causing waves of anxiety among investors and traders. Justin Sun, the founder of Tron, is trying to save the situation by offering to buy bitcoins held by the German government. This would mean buying 40,359 BTC.
Vitalik Buterin’s Wealth
Finally, let’s get into the subject of Vitalik Buterin. The co-founder of Ethereum already has, as we know from onchain data, $707.70 million, mostly in ether.
Community reactions to the revelation of Buterin’s wealth have been mixed, with some emphasizing his focus on technological advancement rather than personal wealth. One X user wrote, “I think Vitalik Buterin doesn’t care how much money he has. His wealth is in the blockchain and his belief in what he does. That’s why I don’t care if he’s the richest man in the world or the poorest. Get inside his mind, not his wallet.”
– describes Selig.
Summary
As the zondacrypto analyst sums up for us, “the last few weeks have been turbulent for the cryptocurrency market.”
The sharp price drops, government actions, and Mt. Gox withdrawals have created uncertainty and volatility. Investors must be prepared for further volatility and closely monitor developments. Despite these challenges, the technological fundamentals and long-term prospects for cryptocurrencies remain strong
– says Seliga.
