Bitcoin’s price rollercoaster may have left some feeling queasy, but the asset is clawing its way back up to $62,000 after a recent dip. Despite some relief on Tuesday, Bitcoin has taken a tumble in June, dropping as much as 16% from its near all-time highs of $71,000. The Federal Reserve’s hawkish tones following its June policy meeting have been a key factor in the descent, according to Kaiko analyst Dessislava Aubert.
However, there are additional crypto-specific factors at play, according to Grayscale’s Zach Pandl. Outflows from spot Bitcoin ETFs, the selling of seized Bitcoin by the German government, and expected selling from Mt. Gox creditors have created an “overhang” that is putting pressure on Bitcoin’s price. Despite this, Pandl believes that Bitcoin’s fundamentals have not changed significantly, suggesting that valuations will eventually recover once the current selling pressure subsides.
Bitwise CIO Matt Hougan likened the dynamic affecting Bitcoin’s price to “lock boxes,” explaining that various crypto bankruptcies or seizures have historically taken Bitcoin out of circulation, reducing supply. However, the recent repayment of Mt. Gox’s customers, who lost 740,000 Bitcoin in 2014, could lead to an influx of Bitcoin hitting the market soon. Galaxy Digital’s Alex Thorne estimated that approximately 6,500 Bitcoin could be sold if most Mt. Gox customers hold onto their recovered assets.
Kaiko’s Aubert highlighted increased selling pressures from large Bitcoin holders, such as miners, as a potential factor exacerbating volatility in the market. With the asset’s volume historically low and summer looming, these factors could further impact Bitcoin’s price in the coming months. However, Pandl remains optimistic, pointing to potential price catalysts such as the approval of spot Ethereum ETFs for trading this summer.
Looking beyond the crypto market, Wall Street darling Nvidia has faced recent challenges, with shares slipping 7% over the past week. Trading hands at around $121.33, Nvidia’s fall coincided with a slight retreat in the tech-heavy Nasdaq. Despite these headwinds, Pandl believes that the approval of Ethereum ETFs and other upcoming positive catalysts could benefit the overall crypto market, presenting attractive entry points for investors with a longer time horizon.
