On Tuesday, the first day of trading ether ETFs, Bitcoin led the cryptocurrency market on a downward spiral as Mt. Gox transferred more Bitcoin to its creditors. Meanwhile, Investors have taken profits following the cryptocurrency’s best week since March 2024.
The last bitcoin price decline was 3% at $65,892.01, while Ether’s decline was 1% at $3,476.04, according to Coin Metrics. Investors and analysts attribute the movements to profit-taking following gains of 22.85% and 12.75% last week.
In addition, the Bitcoin network shows activity of approximately 5,000 bitcoins leaving Mt. Gox to its creditors as part of its repayment process, which began this month. However, that is just the beginning, as the exchange has until October this year to return over 140,000 bitcoins to its creditors because of a hack that occurred 10 years ago.
While this implies a significant influx of Bitcoin, the market is anticipated to withstand the impact, supported by long-term optimizations in Ether ETFs and the forthcoming United States presidential elections.
We are aligned with the market consensus that the adoption out of gate here will likely be relatively slow and modest compared to the bitcoin ETF adoption. Part of that is the bitcoin ETF adoption is in the early innings – a lot of the largest pools of money for that ETF have not even been turned on yet.
Devin Ryan, an analyst at JMP Securities.
Yet, Nexo co-founder Antoni Trenchev suggests that ether might be experiencing volatility currently. He pointed out the January launch of the bitcoin ETF, noting how the cryptocurrency initially surged, then fell by 20%, before subsequently reaching a new all-time high.
Much like the bitcoin ETF, it will take time for inflows into the ETH ETF to create enough supply shock to significantly move the markets.
Ben Kurland, CEO of DYOR
In terms of the United States presidential election, Kurland explained that the dropout of President Joe Biden from the presidential race has brought uncertainty to the market. Investors are presently awaiting concrete updates regarding Vice President Kamala Harris’s position on cryptocurrency and the potential impact on her standing in the polls.
Bitcoin’s drop from recent highs reflects the sudden arrival of Kamala Harris into the U.S. presidential election, which adds uncertainty to a race that seemed to tilt in favor of Donald Trump and his new pro-crypto stance.
Ben Kurland, CEO of DYOR