Bitcoin
Cryptocurrencies Fall on First Day of Ether ETFs as Mt. Gox Moves More Bitcoin to Lenders
People walk past a neon sign advertising a Bitcoin and Ethereum cryptocurrency exchange in Warsaw, Poland, May 19, 2024.
Jaap Arriens | Nurphoto | Getty Images
Bitcoin led the cryptocurrency market lower on Tuesday – the first day of trading for ether ETFs – as Mt. Gox transferred more bitcoin to lenders and investors took profits after the cryptocurrency’s best week since March.
The price of bitcoin fell 3% to $65,891.50, according to Coin Metrics. Etherfell less than 1% to $3,476.04. Investors and analysts attribute the moves to profit-taking after its gains of 22.85% and 12.75%, respectively, last week.
Additionally, Bitcoin network activity shows that Mt. Gox moved around 5,000 bitcoins off the exchange, likely as part of the creditor repayment process began this month. The exchange, which went bankrupt after a major hack 10 years ago, has until October to return more than 140,000 bitcoins to victims of the event.
The market is expected to absorb the negative impact, thanks to long-term optimism about the success of ether ETFs, as well as the US presidential election.
“We are aligned with the market consensus that adoption here now will probably be relatively slow and modest compared to bitcoin ETF adoption,” said Devin Ryan, an analyst at JMP Securities. “Part of it is that bitcoin ETF adoption is in its early days — many of the largest pools of money for these ETFs haven’t even been activated yet,” he added.
In the meantime, however, ether can be volatile, according to Nexo co-founder Antoni Trenchev. He pointed to the launch of bitcoin ETFs in January, when bitcoin surged before plunging 20% and then proceeding to another new high.
“Like the Bitcoin ETF, it will take time for inflows into the ETH ETF to create enough of a supply shock to meaningfully move markets,” said Ben Kurland, CEO of cryptocurrency research platform DYOR.
Furthermore, he added, the President’s decision Joe Biden for fall out of the presidential race introduces uncertainty into the market.
“Investors [are] waiting for more concrete developments on [Vice President Kamala] Harrisits stance on cryptocurrencies and the likelihood of it regaining some ground in the polls,” he said.
Trenchev echoed this sentiment.
“Bitcoin’s decline from recent highs reflects the sudden arrival of Kamala Harris in the US presidential election, adding uncertainty to a race that had seemed to be tilted in her favor. Donald Trump it’s him new pro-crypto stance,” he said.