Markets
Cryptocurrencies fall on first day of ether ETFs as Mt. Gox transfers more bitcoin to creditors
People walk past a neon sign advertising a Bitcoin and Ethereum cryptocurrency exchange in Warsaw, Poland, May 19, 2024.
Jaap Arriens | Nurphoto | Getty Images
Bitcoin sent the cryptocurrency market lower on Tuesday — the first day of trading for Ether ETFs — as Mt. Gox transferred more bitcoin to creditors and investors took profits after the cryptocurrency’s best week since March.
Bitcoin price fell 3% to $65,891.50 according to Coin Metrics. Etherfell less than 1% to $3,476.04. Investors and analysts attributed the moves to profit-taking after their respective gains of 22.85% and 12.75% last week.
Additionally, Bitcoin network activity shows that Mt. Gox moved approximately 5,000 bitcoins off the exchange, likely as part of creditor repayment process It started this month. The exchange, which went bankrupt after a major hack 10 years ago, has until October to return more than 140,000 bitcoins to victims of the event.
The market is expected to absorb the negative impact, thanks to long-term optimism about the success of ether ETFs as well as the US presidential election.
“We are in line with the market consensus that immediate adoption here will probably be relatively slow “This is still modest compared to Bitcoin ETF adoption,” said Devin Ryan, an analyst at JMP Securities. “Part of the reason is that Bitcoin ETF adoption is still in its early stages: many of the largest pools of money for these ETFs haven’t even been activated yet,” he added.
In the meantime, however, ether could be volatile, according to Nexo co-founder Antoni Trenchev. He pointed to the launch of Bitcoin ETFs in January, when bitcoin surged before falling 20% to hit a new high.
“Much like the Bitcoin ETF, it will take time for inflows into the ETH ETF to create enough of a supply shock to move markets meaningfully,” said Ben Kurland, CEO of crypto research platform DYOR.
Furthermore, he added, the president’s decision Joe Biden has give up of the presidential race introduces uncertainty into the market.
“Investors [are] pending more concrete developments on [Vice President Kamala] Harrisits position on crypto and the likelihood of it regaining ground in the polls,” he said.
Trenchev echoed this sentiment.
“Bitcoin’s drop from recent highs reflects the sudden arrival of Kamala Harris in the US presidential election, adding uncertainty to a race that appeared to be tilted in her favor. Donald Trump and his new pro-crypto stance,” he said.