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Bitcoin Drops Below $57,000 Amid Mt. Gox Trustee Test Transactions
Three wallets linked to Mt. Gox conducted two small Bitcoin transactions today, including sending funds to one of the five exchanges designated for creditor repayments. According to Arkham Intelligence, these movements involved just $24 worth of Bitcoin. The funds were transferred to Bitbank, one of the exchanges facilitating the $9 billion repayment. This may have been a test transaction, as the main repayments are expected to start in early July. Bitcoin's price has dropped over $10,000 in the past month, currently trading around $57,600.
US and German Governments Transfer $738M in Bitcoin to Exchanges Over Past Two Weeks
Germany and the US have recently sent $737.6 million in Bitcoin to exchanges like Coinbase, Bitstamp, and Kraken. Germany's transactions account for about three-quarters of this total, involving 7,828 BTC in 30 transactions, primarily in the mornings. While some of the Bitcoin has been returned to original addresses, Germany's transfers, believed to be their first, are part of liquidation efforts from seized assets, including from Movie2k. The US, previously selling Bitcoin at auction, sent 3,940 BTC to Coinbase Prime worth $241.22 million, linked to a drug dealer's assets. The US has liquidated nearly $590 million in Bitcoin since November 2020, missing out on an estimated $370 million by selling early. Additionally, the US has sold $49.1 million in ETH and $2.6 million in DAI since September 2020, missing nearly $310 million in potential gains. Combined, the US and Germany have directed $1.14 billion in seized crypto assets to exchanges over four years, with the US still holding about $13.3 billion in crypto assets.
South Korean Government Launches Real-Time Crypto Fraud Monitoring System
South Korea’s Financial Supervisory Service has announced the launch of a 24-hour surveillance system for monitoring suspicious cryptocurrency activity, set to begin on July 19. This system, developed in collaboration with local exchanges, aims to filter out irregular transactions using standardized reporting and simulation-based criteria. The new monitoring comes alongside the enforcement of South Korea’s first comprehensive crypto regulation, the Virtual Asset User Protection Act, which targets illicit market practices and mandates robust user fund protection measures. The country is also working on additional legislation to further regulate the crypto market.
Trading Desk Insights
The cryptocurrency market is experiencing significant pressure today. A German government-affiliated wallet has transferred its largest BTC holding, valued at approximately $175 million, to exchanges. Additionally, Mt. Gox wallets, which had been inactive for a month, showed activity through three test transactions worth $25, indicating potential asset distributions and heightened selling pressure.
BTC has now dipped below the critical 200-day moving average for the first time since October, suggesting a potential downtrend in the upcoming months. This technical indicator's psychological impact will be underscored if BTC prices close the trading session below the 58,500 mark. However, if prices manage to end the day above this level, bullish sentiment may find short-term relief. There's still a chance for the bulls to regain market control, supported by the rising trendline connecting the October and January lows. A break and close below these technical levels could trigger bearish implications, potentially driving prices down to $52,000.
In the US BTC ETF sector, there has been no notable activity. Over the past two days, there were outflows amounting to $34.2 million, despite Monday's inflow of $129.5 million following a rebound.
The US equity market is closed today in observance of Independence Day.
Market participants are eagerly anticipating Friday's jobs report, which is expected to show a slowdown in payroll growth, raising concerns about the broader economy. With increasing indications that the labor market is slowing, the June nonfarm payrolls report holds significant importance.
The Federal Open Market Committee (FOMC) minutes from their recent meeting indicate that the committee is not ready to cut interest rates until there is greater assurance that inflation is moving towards their 2% target. The members emphasized the need for more data and clear evidence that inflation is on a sustainable path before considering rate reductions. This cautious stance reflects their ongoing concerns about inflationary pressures and the necessity to ensure economic stability.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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