Bitcoin
Bitcoin Briefly Falls Below $60K, SEC Drops Ethereum Investigation
Key Takeaways
- The price of Bitcoin continued its month of suffering as the price briefly fell below $60,000 on Monday.
- Former bitcoin exchange Mt. Gox has announced that distribution of funds owed to former customers will begin in early July.
- The Securities and Exchange Commission (SEC) has closed its investigation into Ethereum without bringing charges against blockchain technology company Consensys.
- Crypto asset manager Hashdex has filed for a combined bitcoin-ether spot ETF.
- This week, analysts will be watching to see if bitcoin can arrest its decline, while also keeping an eye on the US presidential debate on Thursday.
June has not been kind to bitcoin: the cryptocurrency’s price briefly fell below the $60,000 level on Monday after it looked like it might surpass its previous high of more than $73,000 earlier in the month.
The latest negative news for bitcoin comes in the form of an upcoming bitcoin distribution due to former customers of the defunct bitcoin exchange Mount Goxwhich is estimated to involve up to 140,000 bitcoins hitting the market.
That said, last week wasn’t all bad news for crypto, as the US Securities and Exchange Commission (SEC) concluded its investigation into Ethereum and blockchain technology firm Consensys without bringing any charges. Additionally, crypto asset manager Hashdex filed for spot crypto exchange-traded fund (ETF) which will focus on diversification.
Mt. Gox Refund Plan Causes Bitcoin Jitters
Defunct bitcoin exchange Mt. Gox has announced that it will begin the long-awaited process of returning assets to its customers in July, more than a decade after it filed for bankruptcy following several hacking incidents. The total amount of bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 bitcoins, potentially valued at up to $9 billion.
While some investors fear that the influx of these bitcoins could depress prices, others argue that the potential selling pressure may be exaggerated, noting that lenders have had years to sell their claims if they urgently needed funds. The announcement of imminent refunds from Mt. Gox caused the price of bitcoin to briefly fall below $60,000 on Monday, continuing its downward trend for the month.
According to data from Farside Investors, spot bitcoin ETFs have now suffered their largest outflows in a two-week period since US spot bitcoin ETFs were approved in January, with investors withdrawing $1.1 billion net of these funds during that period.
SEC closes investigation into Ethereum 2.0
On June 18, blockchain Technology company Consensys announced that the SEC’s enforcement division has concluded its investigation into Ethereum 2.0. Despite the closure, the SEC’s position on whether etherThe native token of the Ethereum blockchain qualified as a security remains ambiguous.
According to Consensys, the regulator began its investigation into Ethereum last year and the company sued the SEC earlier this year, claiming that Ether was a commodity and that the SEC did not have jurisdiction to investigate.
Although SEC Chairman Gary Gensler has not definitively labeled ether as a security, the Commodity Futures Trading Commission (CFTC) consider it a commodity. The closure of the investigation may indicate that the SEC tends to treat ether as a commodity, although the SEC’s future actions remain uncertain.
According to Fortune, Consensys’ legal battle with the SEC will continue despite the recent announcement. The conflict originally stems from the SEC’s scrutiny of the crypto wallet owned by Consensys MetaMask, particularly its token exchange capabilities and staking access. The SEC asserts that these functions constitute unlicensed brokerage activities involving unregistered crypto asset securities. Consensys indicated that while the closure of the Ethereum 2.0 investigation is a victory, it does not fully address the broader regulatory issues.
Hashdex Files for Bitcoin-Ether Combined ETF
With spot bitcoin ETFs already traded in the US and locate ether ETFs seemingly just around the corner, the next development could be an ETF combined with the two main cryptocurrencies. Hashdex, a crypto asset manager, is leading this effort with a recent filing for the Hashdex Nasdaq Crypto Index US ETF.
If approved, this ETF would be the first in the US to directly hold bitcoin and ether. According to Nasdaq’s filing with the SEC, the ETF will track the Nasdaq Crypto Index (NCI), which is weighted by market capitalization. Coinbase Custody and BitGo are set to serve as custodians. The ETF aims to provide a passive investment strategy, offering investors exposure to global market performance. Hashdex already has a similar product in Brazil.
While the new ETF will initially focus on bitcoin and ether, the filing leaves room for the inclusion of additional crypto assets in the future, as long as they meet regulatory criteria. Bloomberg analyst James Seyffart noted that the SEC’s final decision on the Hashdex enforcement is expected in early March 2025.
What to expect from the markets this week
Crypto market analysts will be closely watching the price of bitcoin this week, waiting for signs that the bleeding will stop, especially in the context of high bitcoin ETF outflows and upcoming Mt. Bitcoin distributions.
However, some market observers, such as Caitlin Long, founder and CEO of Custodia Bank, say that the bitcoin price decline is not something to worry about in the context of the recent halving event. “It is normal for a price drop like this to happen after a reduce by half– halvings are incredibly optimistic, but bull markets don’t typically begin until several months later – for fundamental reasons,” Long posted on X.
All eyes will also be on Thursday’s US presidential debate between Joe Biden and Donald Trump, as conversations about cryptocurrencies find momentum in the campaign.
Former President Trump has changed his stance on bitcoin, now apparently supporting the cryptocurrency without making any definitive regulatory or policy-related comments for digital assets. Due to the SEC’s aggressive enforcement actions during his administration, President Biden, by extension, has not been seen as supportive of crypto – an image his campaign is trying to dissociate from him, although there are no specific details about the field’s crypto policy. any.