Cryptocurrency Market Sees Turbulent Times

The cryptocurrency market has been experiencing a tumultuous month, with Bitcoin’s price briefly dipping below $60,000 on Monday. This decline comes after the cryptocurrency seemed poised to surpass its previous all-time high of over $73,000 earlier in the month.

Bitcoin’s price has been on a downward trend this month.

One of the main factors contributing to this decline is the upcoming distribution of Bitcoin owed to former customers of defunct exchange Mt. Gox. This distribution, set to begin in early July, is estimated to involve as many as 140,000 Bitcoin, potentially valued at up to $9 billion.

“It’s normal for a price dip like this to happen after a halving—halvings are incredibly bullish, but bull markets don’t start until typically several months later—for fundamental reasons.” - Caitlin Long

Despite this negative news, the past week hasn’t been all bad for crypto. The U.S. Securities and Exchange Commission (SEC) concluded its investigation into Ethereum and blockchain technology firm Consensys without filing any charges. Additionally, crypto asset manager Hashdex has filed for a spot crypto exchange-traded fund (ETF) that will focus on diversification.

Mt. Gox Repayment Plan Causes Bitcoin Jitters

The defunct Bitcoin exchange Mt. Gox announced it will begin the long-awaited process of returning assets to its customers in July, over a decade after it filed for bankruptcy following multiple hacking incidents. The total amount of Bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 Bitcoin, potentially valued at up to $9 billion.

Mt. Gox’s repayment plan has caused concern among investors.

While some investors worry that the influx of these Bitcoins could depress prices, others argue that the potential selling pressure may be overstated, noting that creditors have had years to sell their claims if they needed funds urgently.

SEC Closes Ethereum 2.0 Investigation

On June 18, blockchain technology company Consensys announced that the SEC’s enforcement division has concluded its investigation into Ethereum 2.0. Despite the closure, the SEC’s stance on whether Ether, the native token of the Ethereum blockchain, qualifies as a security remains ambiguous.

The SEC’s investigation into Ethereum 2.0 has been closed.

According to Consensys, the regulator began its investigation into Ethereum last year and the company sued the SEC early this year, claiming that Ether was a commodity and that the SEC lacked jurisdiction to investigate.

Hashdex Files for Combined Bitcoin-Ether ETF

With spot Bitcoin ETFs already trading in the U.S. and spot Ether ETFs seemingly right around the corner, the next development could be a combined ETF featuring both leading cryptocurrencies. Hashdex, a crypto asset manager, is spearheading this effort with a recent filing for the Hashdex Nasdaq Crypto Index US ETF.

Hashdex has filed for a combined Bitcoin-Ether ETF.

If approved, this ETF would be the first in the U.S. to directly hold both Bitcoin and Ether. According to Nasdaq’s filing with the SEC, the ETF will track the Nasdaq Crypto Index (NCI), which is weighted by market capitalization. Coinbase Custody and BitGo are set to serve as custodians.

What to Expect in the Markets This Week

Crypto market analysts will be watching the Bitcoin price closely this week, hoping for signs that the bleeding will stop, especially in the context of high Bitcoin ETF outflows and the upcoming Mt. Gox distributions. All eyes will also be on Thursday’s U.S. presidential debate between Joe Biden and Donald Trump, as conversations about cryptocurrencies find momentum on the campaign trail.