Cryptocurrencies Bitcoin sinks below 58,000 dollars - fear of a supply glut
Bitcoin is under heavy pressure. Late on Wednesday evening, the price of the digital asset Bitcoin on the Bitstamp platform was still above the USD 60,000 mark, only to plummet by around 5 percent within twelve hours.
By midday on Thursday, the price had recovered slightly, but was still below the 58,000 dollar mark. Analysts attributed the price slump primarily to an announcement by the insolvency administrator of the failed crypto exchange Mt.Gox.
He had announced that he would hand over a large number of Bitcoins (BTC) to aggrieved creditors. The aggrieved parties have been waiting for years for their coins to be refunded.
After the collapse of the exchange in 2014, users lost a total of 850,000 BTC. Of these, 142,000 BTC were recovered and are now to be handed over to their owners. In the early Bitcoin era, the marketplace in Tokyo was the world's largest trading platform for the digital cryptocurrency. At the end of February 2014, Mt.Gox filed for bankruptcy following a hack, plunging the currency into its first major crisis of confidence.
Oversupply by Mt.Gox creditors?
It is unclear how former Mt.Gox customers will now behave. If a significant number of them want to sell the rescued Bitcoin holdings in the short term, this would lead to an oversupply of Bitcoin on the market. However, the market observers at Glassnode have not yet recorded any major BTC transfers.
Concerns about an oversupply of Bitcoin are also fueled by the fact that law enforcement agencies are sitting on large BTC holdings that they have secured from criminals. The State Criminal Police Office of Saxony alone confiscated around 50,000 Bitcoin in January in the context of investigations into the illegal movie-sharing platform Movie2k.to. The Federal Criminal Police Office (BKA) is also said to regularly exchange confiscated BTC holdings for traditional currencies such as euros or dollars.
Concerns about the Fed
The overall poor mood on the crypto market is also linked to the US central bank, the Federal Reserve. It is currently unclear when and to what extent the Fed could loosen its monetary policy. The calculation here is that as long as interest rates are comparatively high, investors have many options for investing their money profitably. The crypto market then suffers as a result. If, on the other hand, interest rates for traditional investments fall, crypto investments appear more attractive.
