Impact of Mt. Gox transfers on Bitcoin and cryptocurrency markets
The recent transfer of BTC by Mt. Gox, a significant amount
intended for creditor reimbursement, has coincided with a drop in
Bitcoin (COIN:BTCUSD) prices, reaching its lowest level since the
end of February. Following the transfer, Bitcoin’s price fell to
$53,499.90, rebounding to a 1% decrease at $56,473.76 at the time
of writing. BTC’s value has dropped 8.77% in a week, erasing all
gains since February.
The possibility of a massive sell-off by creditors, who are set
to receive around 140,000 BTC, raises fears of intense selling
pressure in the market. Analysts predict that with this pressure,
the price could decline to the $50,000 range in the coming weeks,
highlighting Bitcoin’s sensitivity to large on-chain transactions,
especially those involving liquidations by major entities like Mt.
Gox.
Investor sentiment in cryptocurrencies has also worsened, with
market sentiment hitting the lowest levels since the crypto winter
of 2022. According to the Crypto Fear & Greed Index, developed
by Alternative.me, the score reached 29, indicating “extreme fear,”
a sentiment not seen since January 2023 when Bitcoin was near
$17,000 after a prolonged period of decline.
The shares of cryptocurrency-related companies experienced
significant drops on Friday. Coinbase Global (NASDAQ:COIN) saw its
shares fall by 2.1%, MicroStrategy (NASDAQ:MSTR) faced a 1.3%
reduction, and Marathon Digital Holdings (NASDAQ:MARA) and Riot
Platforms (NASDAQ:RIOT) also registered declines of 5.2% and 0.9%,
respectively. Additionally, Robinhood Markets’ shares (NASDAQ:HOOD)
decreased by 1.9%. The instability in the cryptocurrency market
directly impacts the stock market performance of these
companies.
Meanwhile, Ethereum (COIN:ETHUSD) fell below the $3,000 mark,
priced at $2,983.15 with a -2.4% decline. Binance Coin
(COIN:BNBUSD) dropped by -2.9% to $497.66. Ripple (COIN:XRPUSD)
fell by -1.94%, while Dogecoin (COIN:DOGEUSD) decreased by -0.98%.
Contrarily, Solana (COIN:SOLUSD) and TonCoin (COIN:TONCOINUSD) rose
by 5.9% and 2.6%, respectively.
PancakeSwap launches community reward with zkSync token airdrop
PancakeSwap (COIN:CAKEUSD), a decentralized exchange (DEX), has
launched a community reward campaign running from July 5 to August
5. A total of 2,452,128 zkSync (ZK) tokens will be distributed to
users who have shown continuous support since the implementation of
zkSync on PancakeSwap in July 2023. The airdrop aims to reward both
current and new contributors, involving veCAKE holders, liquidity
providers, and other active participants. This initiative
celebrates the platform’s growth, which has surpassed $3 billion in
transaction volume.
Grayscale Ethereum Trust reaches parity with net asset value
The Grayscale Ethereum Trust (USOTC:ETHE), after three years of
trading at a discount, reached a premium of 0.31% over its net
asset value (NAV) on the eve of Independence Day. This change
occurs amid expectations of Ethereum spot ETFs being launched in
the US, driven by recent SEC approvals for various fund managers.
The closing of the fund’s discount is seen as investor anticipation
of a possible conversion to an ETF, similar to what happened with
the Grayscale Bitcoin Trust.
Bitcoin Cash hash rate surge draws attention and speculation
This week, the hash rate of Bitcoin Cash (COIN:BCHUSD) reached
an annual peak after an anonymous miner named “Phoenix” took over
about 90% of the network’s mining in just two days. Meanwhile, the
BCH token’s value fell to $324.23, a -2.1% drop in the last 24
hours, amid a general market decline and the end of Mt. Gox’s
repayment plans for BCH. During the short period between July 2 and
4, the Bitcoin Cash network started at 3.6 exahashes per second
(EH/s) and spiked to a peak of 9.4 EH/s, the highest rate recorded
this year. After this peak, the hash rate stabilized again,
returning to the weekly average of approximately 3.3 EH/s by the
date of publication. This sudden increase in hash rate brought both
excitement and concerns about the centralization of mining in the
Bitcoin Cash network.
New era of data centers: merging bitcoin mining and AI demand
Private equity firms are beginning to invest in bitcoin miners
due to the rising demand for data centers capable of supporting
artificial intelligence technologies. With the increasing energy
needs imposed by AI, these miners offer ready infrastructure that
can be quickly adapted or expanded to meet intensive computational
demands. Adam Sullivan, CEO of Core Scientific (NASDAQ:CORZ),
reveals that this renewed interest is driving a wave of mergers and
acquisitions in the sector, with the company recently closing a
major contract to support AI operations, attracting even more
attention and investment to the area.
Few bitcoin mining machines remain profitable after price drop
With the recent drop in bitcoin prices to a low of $53,499.90,
only five specific ASIC (Application-Specific Integrated Circuit)
models for bitcoin mining remain profitable. These models include
the Antminer S21 Hydro, Antminer S21, Avalon A1466I, Antminer S19
XP Hydro, and Antminer S19 XP, with breakeven prices ranging from
$39,581 to $53,187. Another model, the Whatsminer M56S++, is on the
verge of profitability, while the popular Antminer S19k Pro has
become unviable due to the low market price of bitcoin.
Global decline of bitcoin ATMs
In the last 40 days, the global network of Bitcoin ATMs has seen
a reduction of 334 units, breaking a ten-month growth trend. This
sharp decline, with 227 machines removed in just five days in July,
follows the drop in Bitcoin prices. While Australia and Spain are
expanding their networks, the US and Europe lead the decline,
driven in part by regulations against financial crimes.
Simultaneously, Bitcoin Depot, the largest US operator of these
cryptocurrency ATMs, reported that its revenues, which totaled $689
million in 2023 and $647 million in 2022, do not correlate with
Bitcoin price fluctuations. Despite a 155% increase in Bitcoin’s
price in 2023, Bitcoin Depot’s revenue grew only 6% in the same
period. The company attributes the lack of correlation to the
diversified nature of its services, which go beyond cryptocurrency
speculation, including international remittances and online
transactions.
German MP criticizes government Bitcoin sell-off and proposes
long-term strategy
German MP Joana Cotar expressed dissatisfaction with the
government’s decision to quickly sell off its bitcoin holdings. She
argues that instead of selling, the government should retain
Bitcoin (COIN:BTCUSD) as a strategic reserve, similar to
discussions in the US. Cotar contends that bitcoin can diversify
and reduce risks in state assets, as well as serve as a hedge
against inflation. She suggests that Germany develop a
comprehensive strategy that includes holding bitcoins, issuing
bitcoin-backed bonds, and creating a favorable regulatory
environment.
Stricter crypto regulation in the EU
The European Banking Authority (EBA) has updated its Travel Rule
guidelines to cover the cryptocurrency sector, requiring that, from
December 2024, cryptocurrency exchanges in the European Union
follow new rules that enhance the transparency of crypto-asset
transfers. The guidelines are part of a broader EU effort to combat
money laundering and terrorism financing, aiming to increase
traceability and facilitate investigations. The regulations require
the collection of detailed information about transfers and the
involved parties.
UK court imposes financial restrictions on Craig Wright in legal
dispute
The UK Supreme Court authorized a Worldwide Freezing Order (WFO)
in favor of Peter McCormack against Craig Wright, resulting from a
prolonged legal dispute over defamation. The decision, made by
Judge Mellor, aims to prevent Wright from hiding his assets to
evade paying high legal fees that McCormack incurred while
defending against defamation accusations. The order sets a limit of
£1.548 million, covering both the costs already awarded to
McCormack and additional expenses due to Wright’s fraudulent
conduct during the case.
Multicoin Capital invests in pro-crypto candidates for the US
Senate
Multicoin Capital, an influential US cryptocurrency investment
manager, has committed to donating up to $1 million to support
Senate candidates with favorable stances toward the crypto
industry. The firm plans to fund four Republican candidates through
the conservative Sentinel Action Fund, conditioning the donation
amount on the results of a crypto fundraising campaign.
Surprise NFT purchase by wallet from bankrupt Three Arrows Capital
A wallet associated with the bankrupt crypto hedge fund Three
Arrows Capital (3AC) acquired an NFT, resulting from an offer made
nearly three years ago and unnoticed by liquidators. The wallet
placed a bid of 20 ETH (equivalent to $58,800) in August 2021 for
the “Neon Village” NFT from the “Ninja Village” collection by
artist SeerLight, which was recently accepted by the seller
“@anonymoux.” The transaction occurred despite the fund being in
bankruptcy, indicating a possible oversight by the liquidation
administrators.
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