Bitcoin’s slump continues amid government selling pressures, Mt. Gox repayments: CNBC Crypto World

Bitcoin’s slump continues amid government selling pressures, Mt. Gox repayments: CNBC Crypto World

today Bitcoin slide continues as the cryptocurrency dips to $55,000 and Matthew seagull head of digital assets research at vanak weighs in on those recent crypto price moves welcome to cnbc’s crypto world I’m TAA mck Bitcoin still hovering around $55,000 by noon Eastern after sinking to that level last week amid Mount gax induced volatility ether still traded below $3,000 after attempting a comeback earlier in the day salana was just slightly higher hovering around $137 now Andy Bear head of product at coin desk indices was on cnbc’s squawkbox this morning to discuss where prices are headed and what’s driving them lower 2024 has been a a sort of a twoa play the first quarter was really strong uptrend we unlocked so much Demand with Bitcoin spot ETFs no one wanted to get in front of that rally the demand worked the market structure worked the ETFs worked flawlessly in Q2 that rally just vled we’ve kind of been wandering since then but now it’s all about the supply from Mount Gau and from the from the governments that have seized Bitcoin the best news is it’s finite right a lot of this is clean up from 10-year-old problems and uh you know we spent a lot of 2023 cleaning up a lot of the dirty dishes from 2022 that was successful so the best news is there’s not enough uh positive flows to really overcome the supply that the market sees over the next couple of months but it’s finite and once it’s done then we’re free to go up from there okay let’s talk about the top stories digital asset linked investment products have seen a return of Interest amid the crypto markets recent decline according to a report from coin shares inflows into Crypt related exchang traded products totaled $441 million in the past week after three consecutive weeks of net outflows the report noted that most of those flows came from the US market coin shares pointed to the price weakness prompted by Mount gaau plus the German government’s recent selling of crypto holding which some investors may have seen as a buying opportunity the report also noted that Bitcoin itself saw just under $400 million in inflows in the past week representing 90% of total crypto inflows coin shares pointed out that that figure was unusually low and pointed to investors choosing a broader range of altcoins like salana and over on the mining front a new report from Jeff Rees this morning found that Bitcoin mining was more profitable in June month over month data collected by the investment bank’s research arm found that average daily revenue Rose more than 9.5% compared to may as bitcoin’s price increased 2% in June while the Network’s hash rate fell by 5% Jeff also took a look at Trends in the mining space pointing out that m&a in the mining space is heating up post having the note pointed both to Riot’s Bid to Buy bit farms and clean spark deel to buy grid infrastructure still Jeff’s lowered its price Target on marathon and Argo blockchain to $22 and a120 respectively all right back to markets for our main story I spoke with Matthew seagull head of digital assets research at vanc to hear his take on the factors Weighing on crypto right now the future of spot ether ETFs in the US and more there was a lot of attention on Mount gaau last week so as we head into this new week what is kind of driving things right now um that was always to me kind of more of a short-term driver but nevertheless Bitcoin is still kind of hovered at that low that it hit last week still under press pressure still under that you know key support of $57,000 so where are we with the mount gaau narrative right now how long do you expect that to remain um you know kind of an overhang and what’s going to be driving things uh in this week yeah so bitcoin’s now off 23% uh since its all-time high in March and just as a reminder of how volatile this asset is uh in the 2021 bull market uh Bitcoin has three 20% plus draw Downs in the 26 2017 bull market there were seven uh 20% plus draw Downs so we’ve had two so far this year that’s pretty normal in the context of what is a pretty volatile asset uh I think the weakness in in recent days is due to sales by government entities including both the US and German government who especially the German government is uh basically dumping their Bitcoin onto spot exchanges right now uh and then there is the overhanging fear of a large distribution from the mount gaau estate uh and those have also uh begun um so I think the the weak price action is is basically spiteful government selling into what was a relatively thin July 4th Holiday Market and we’ve got this overhang of potentially more sales ahead German government is confirming that fears by hitting the sell button this morning um you know recall that Forbes reported this week that Trump advisers were floating the idea of a US Government strategic Bitcoin Reserve so that that’s out there um and then the week’s price action could also be the leading indicator of a macro move that’s happened before um but we don’t have a lot of conviction in in that thesis so what we’re telling clients is that inflation’s continuing to decelerate the US economy looks like it’s in the midst of a soft Landing the long awaited pivot in monetary policy looks closer and we think the election will catalyze fresh all times highs in Bitcoin as the market starts to price in four more years of deficit spending and potentially a friendlier us regulatory backdrop under that Trump Administration so you know dollar cost average this very valid asset uh would be our our our take here what about altcoins um I said at the top I wanted to move to that there was one point this morning where the crypto market across the board was in the green and then it was just Bitcoin alone that was still under pressure um that you know has changed throughout the day but what should investors be looking at in the altcoin space right now what do you make of how alts have been trading lately as compared with Bitcoin and ether yeah you know the correlation between these coins for their daily returns is is very very high and when you’re in a normal Market on a down day the large caps BTC Bitcoin and ethereum tend to outperform uh but when you have a large amount of liquidations and selling across the asset class as we’ve seen over the last three days then the market kind of flips and Bitcoin and ethereum can actually underperform because folks are selling what they have a lot of so so I think that’s the dynamic that we saw uh over the weekend with leveraged participants getting liquidated and a bit of force selling in Bitcoin and eth uh and but when you look at the year-to DAT returns it’s still Majors which have outperformed we’re hopeful that a number of these spot ethereum ETFs will list in the coming weeks uh and so my guess is that uh you know Majors out perform on the way up as well and then turning to the ETFs you know we are looking to get some news out of those this week next week um what are you expecting from eth ETFs as a launch as compared to the way the Bitcoin ETFs launched in January and what would be um you know considered a successful launch in terms of inflow as compared to what we saw in January with the Bitcoin ETFs so without without commenting on the specifics of these filings uh which are still being up dated um SEC chair Gary gendler did say uh about 10 days ago that the applications were going smoothly uh so this is I guess one time that I agree with his take on crypto uh and you most independent estimates put the market opportunity for the spot ethereum ETFs somewhere between 10% and 30% of the Bitcoin ETF market so maybe you know 10 to to 15 billion in in total assets including the grayscale ethereum trust um I think that the eth demand you know it it has the potential to disappoint in the short term if this if they launch under this type of tape but over the long run we think that um the market opportunity for productive yield bearing assets like ethereum is bigger than it is for inert digital gold like Bitcoin and many Tech investors who are hesitant to buy the mega cap web 2 Giants at these levels having massively outperformed with res relatively high valuations are going to be open to adding ethereum as a hedge uh looking at it as a play on the open-source app store story that’s how we’re framing ethereum as a competitor to Google Play and the Apple App Store uh but with a much lower take rate and we think that’s an attractive alternative uh for entrepreneurs and developers and if you just look at the total number of users on these smart contract platforms like ethereum they hit an all-time high just last month so despite the price action we’re seeing Builders developers entrepreneurs using these open- Source databases to compete with Apple and Google and we think that’s going to continue so for the rest of the year say eth and Solana will outperform Bitcoin on that narrative okay that’s all for crypto world today we’ll be back again tomorrow and we’ll see you then

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Matthew Sigel, head of digital assets research at VanEck, weighs in on the recent decline in crypto prices.

Chapters:
00:00 – CNBC Crypto World, July 8, 2024
0:19 – Bitcoin’s slump continues
1:31 – The headlines
3:12 – Matthew Sigel of VanEck

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Bitcoin’s slump continues amid government selling pressures, Mt. Gox repayments: CNBC Crypto World