- Bitcoin plunges to a five-month low of $53,600
- Two major reasons why crypto market is declining
- Mt. Gox to unload 141,000 bitcoins worth over $9 billion into the market
The crypto market has witnessed serious bleeding since the beginning of July. Nearly all coins, including the giants, Bitcoin, Ethereum, Doge, Solana, XRP, and BNB have been affected.
On July 4, the crypto market cap plunged to $2.11 trillion, a 5.32% decrease over the previous day. Bitcoin bled too. The popular crypto traded as low as $56,867.92, down 5.62% from the previous day. The global crypto market cap was down 5.56% at $1.12 trillion, while the volume of trade in the past 24 hours was up 37.70% at $37.99 billion.
The decline continued on July 5. At the time of writing, the crypto market cap plunged further to $2.03 trillion, a 3.51% decrease over the last day. The bitcoin price slipped further down to $55,622.84, down 2.17%. Earlier in the day, it traded as low as $53,717.
Market cap performance
Why the crypto market is declining
Now the question is, why is the market bleeding? There are two major reasons why the market is declining at this time.
Mt. Gox Repayments
Late month, Mt. Gox, a cryptocurrency exchange that operated in Tokyo between 2010 and 2014, announced that it was ready to repay its customers the money they lost when the exchange crashed.
Repayment update statement by Mt. Gox
The platform handled over 70% of Bitcoin transactions at its peak. Mt. Gox declared bankruptcy in 2014 and was sued by customers. The lawsuits and possible repayments were subject of speculation for years.
The repayment, according to Mt. Gox, would be in Bitcoin and Bitcoin Cash. This means that 141,000 bitcoins worth over $9 billion would be unloaded into the market.
Market sentiment
The announcement triggered sell-offs as the month started. Early on Friday, the exchange announced that it had started making repayments to customers. This added pressure to the market and Bitcoin plunged to a five-month low of $53,600. The price pressure led to the liquidation of over $580 million in bullish bets. Bitcoin started the month at $63,000.
Willy Chuang, the Chief Operating Officer of crypto exchange WOO X, via Coindesk, provided an explanation: "Mt. Gox moved 47,228 BTC, signaling the start of their repayment process, which has caused some market fear due to the large potential sell-off... However, it's worth noting that despite these concerns, the long-term impact may be less severe as the market gradually absorbs the selling pressure.”
Bitcoin price movement
German government’s sale of Bitcoin
In the past weeks, the German government has been selling off its Bitcoin holdings.
On July 4 alone, the German Federal Criminal Police Office (BKA) moved an estimated $75 million worth of Bitcoin across multiple transactions. Coinbase, Kraken, and Bitstamp are among the exchanges the funds were spread to.
The government has moved about $315 million in Bitcoin to various platforms since mid-June. In just under a month, the country has offloaded more than $390 million in Bitcoin.
Transactions by the German government
Despite the sales, the amount sold is just a small amount of the country’s Bitcoin trove. The EU country still holds around 40,000 Bitcoins.
This movement has added to the pressure on the market and further pushed numbers down.
KuCoin to charge 7.5% VAT on trading fees for Nigerian users
Meanwhile, TheRadar earlier reported that KuCoin, one of the leading crypto exchanges used by Nigerians, has said it would begin to charge a 7.5% Value Added Tax (VAT) fee on trades executed by its users whose Know Your Customer (KYC) is registered in Nigeria.
In a post on X, the exchange described it as a “regulatory update that impacts our users from Nigeria” and stated that the new measure will take effect from July 8th, 2024.
