Why is $BTC dumping?
This is the result of combined many factors
Mt. Gox, ETFs, halving, Germany, and much more
Here is something that might help to understand what is happening and why and leads to where.
Over the past week, Bitcoin has dropped from $71k to $57k, a decline of around 20%, something we haven't seen in a long time.
Effect of Mt. Gox
This cryptocurrency exchange collapsed in 2014 due to a hacking attack.
Late last month, news emerged that Mt. Gox is ready to repay its creditors.
The exchange's representatives will distribute 142,000 BTC (0.68% of total supply) among its clients
Many fear that creditors will decide to sell the received Bitcoins.
Given the amount of BTC they will have, this will undoubtedly impact the market.
Moreover, the mere fear that this might happen is causing many to sell their assets
Spot Bitcoin ETFs
They have made the cryptocurrency's price more dependent on the sentiments of large investors.
Currently, BTC ETFs hold 5% of Bitcoin's total supply.
At the beginning of this month, there was a renewed outflow from ETFs, and these changes are also putting pressure on the cryptocurrency's price
Bitcoin Halving and Miners Reward
On April 20, 2024, was halving occurred, reducing miners' rewards from 6.25 to 3.125 BTC per block.
For miners to remain interested in their work, a rise in BTC price was necessary, and many were expecting this.
However, it didn’t happen, and many miners are now forced to sell their BTC
U.S. Interest Rates
The lower the interest rate, the more attractive high-risk investments (such as crypto)
The minutes from the FRS meeting showed that policymakers are unwilling to lower rates until there is more data indicating that inflation is moving toward the target rate of 2%
German BTC Holdings
The German government owns a significant amount of BTC and has started selling its assets.
According to Arkham, the German government recently transferred 400 BTC to the exchanges Bitstamp, Coinbase, and Kraken.
In total, 2,700 BTC have been moved to exchanges from the government's wallet over the past two weeks
These are few factors which potentially lead to such drastic price changes in current market,
$BTC Made to bleed every single altcoin which led to a complete blood bath, ‼️
Major Investors are not selling BTC
Despite Bitcoin's decline, companies are not selling their assets. On the contrary, many have started buying BTC amidst the drop.
The largest miner, Marathon Digital Holdings, has not disposed of its assets, despite needing to free up capital
its always great to do your own research.
In my opinion, BTC is an excellent long-term investment. I am not worried about the future of cryptocurrencies; I believe the market is in good shape. Its almost over decade now being in this industry, i have seen many crises, so just few bad moves can’t wipe out over $2Trillion Cap industry.
We are yet to witness the wildest BullRun, this is just probably wild shake outs to get rid of weak hands, dyor $ETH