The cryptocurrency is falling in early trading. Experts see several reasons for this – including fears of a supply glut.
Bitcoin fell significantly in early trading on Friday. The price temporarily dropped below the $54,000 mark, its lowest level since the end of February. At $54,025, the price was recently almost 8.3 percent below the previous day’s level. The oldest and most important digital currency has been under pressure for weeks. At the beginning of June, Bitcoin cost just under $72,000. Other digital currencies such as Ethereum, BNB and Solana also lost significant value.
Experts attributed the losses in Bitcoin and other cryptocurrencies on Thursday and Friday morning, among other things, to a statement from the insolvency administrator of the failed crypto exchange Mt.Gox. The exchange had announced that it would hand over a large number of Bitcoin tokens (BTC) to injured creditors. The injured parties have been waiting for years for a refund of their coins. This could lead to a glut of supply.
It is unclear how the former Mt.Gox customers will behave now. 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.
The concern about a Bitcoin oversupply is also fueled by the fact that law enforcement agencies are sitting on large BTC stocks that they have secured from criminals. The bad mood on the crypto market in recent weeks is also related to the US central bank, the Federal Reserve. It is currently unclear when and to what extent the Fed might loosen its monetary policy. The calculation here is: as long as interest rates are comparatively high, investors have many options to invest their money profitably. The crypto market then suffers as a result. If interest rates for classic investments fall, however, crypto investments appear more attractive.
Source: Stern
