According to a report by asset manager ARK Invest released on July 18, Bitcoin became oversold in June due to Germany’s government initiating a multibillion-dollar sell-off of 50,000 BTC seized in a 2020 police sting against Movie2k, a streaming platform for pirated content.
This sell-off caused Bitcoin prices to plummet from highs exceeding $70,000 in early June to a low of less than $55,000 during a brief dip in July.
“Based on short-term-holder realized profits/losses and miner outflows, Bitcoin appears oversold,” the report stated.
The report, which focuses on the period through June 30 but includes more recent data, added, “Current levels [of miner outflows] suggest that miners are capitulating, a harbinger of a bullish reversal.”
Another bullish signal identified by ARK is investors’ sustained appetite for BTC exchange-traded funds (ETFs).
The report highlighted that BTC’s sharp sell-off did not trigger a mass exodus from spot BTC ETFs.
By June 30, the drop in BTC’s spot price had overshot the 30-day percent change in BTC ETF flows by 17.3%.
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July saw billions of dollars of net inflows into BTC ETFs, with about $1.35 billion entering the funds in the week ending July 15, according to CoinShares.
BlackRock’s iShares Bitcoin Trust (IBIT) recorded $107 million in inflows on July 18 after nine straight days of inflows, according to Thomas Fahrer, co-founder of the crypto data platform Apollo.
Despite these positive signals, there are risks to BTC’s continued strong performance from global economic data.
ARK noted that corporate profits are steadily falling as pricing power diminishes, indicating economic weakness.
Bitcoin prices also face potential challenges from the defunct cryptocurrency exchange Mt. Gox’s repayment of approximately $9 billion in BTC to creditors.
However, unlike Germany’s abrupt sell-off, industry analysts believe that creditors may opt to hold onto their BTC, which could soften any potential negative impact on the broader market.
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The German government aimed to sell its Bitcoin holdings quickly without focusing on minimizing market impact or maximizing profitability.
The selling pattern of the government-labeled wallet, which included large transfers to various centralized cryptocurrency exchanges (CEXs), indicated an intention to cash in short-term profits, according to Miguel Morel, founder of Arkham Intelligence.
Morel noted that the transfers to multiple exchanges were made to maximize Bitcoin liquidity.
He told Cointelegraph during an interview at EthCC, “The last thing I would have expected is that they would just go to five different exchanges and start market selling… The fact that they’re going to so many different exchanges just reads like they’re just trying to get as much liquidity from each order book as possible because otherwise, why wouldn’t you just use one?”
He explained that setting up accounts and transferring funds to five different exchanges is more complex than selling through a single one.
The outflows and news surrounding the German government’s Bitcoin sales exerted downward pressure on Bitcoin.
The price of Bitcoin began to recover from June’s downtrend only after the government exhausted its Bitcoin supply.
Bitcoin’s price recovery above the $60,000 psychological mark occurred on July 14, a day after the government-labeled wallet ran out of BTC.
During June, Bitcoin’s price fell over 7% but then staged an over 11% weekly recovery, trading at $64,688 as of 1:50 pm UTC, according to CoinMarketCap data.
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The decline in Bitcoin’s price was not solely due to the German government’s selling.
Other factors, such as the incoming creditor repayments from Mt. Gox and stagnating Bitcoin exchange-traded fund (ETF) flows, also contributed to the price slump.
According to Morel, the volume of Bitcoin sold by the government had less impact on the price than the market’s reaction to the news.
He explained, “It could well be that there’s $20 billion of Bitcoin volume a day, and the German government selling $60 million a day is easily absorbed.
“It could also be the case that because there’s news of the German government selling… there’s $5 billion going out the door on the retail side because they’re afraid of getting caught.”
Popular analyst RunnerXBT suggested that a real opportunity to gain long exposure for Bitcoin would come after the market has absorbed the Mt. Gox repayments, similar to the scenario following the German government’s Bitcoin sales.
The analyst wrote, “Just like with Germany transfers, eventually, they will have no price impact. That’s when I hope to long.”
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In just three hours on July 16, Mt. Gox moved over 140,000 Bitcoin, valued at nearly $9 billion, to a known cold wallet and two unknown addresses.
According to Arkham Intelligence data, Mt. Gox’s main wallet still holds 138,985 Bitcoin (BTC), worth around $8.7 billion.
This marks the first time in two weeks that funds have been mobilized.
Two major transactions occurred: nearly 96,000 BTC, worth over $6 billion, were transferred to two unknown wallets, while an initial 44,527 BTC was sent to a known Mt. Gox cold wallet.
Arkham Intelligence reported over 140,000 BTC moved in just three hours.
The total volume of Mt. Gox’s BTC transactions on July 16 reached almost 190,000 BTC, equating to over $12 billion in value.
One unknown address, ending in “BHDct9b,” received 42,587 BTC, valued at $2.69 billion. The remaining 4,641.24 BTC, worth $293.94 million, was transferred to “Mt. Gox: Cold Wallet (1Jbez).”
The “BHDct9b” address has yet to transfer the 42,587 BTC, causing market fear and a decline in Bitcoin’s value as sentiment turned negative.
Shortly afterward, another 48,641 BTC, valued at $3.07 billion, was sent to a different unknown address, further depleting the main Mt. Gox wallet.
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The BTC price reached nearly $65,000 earlier on July 16 but dropped to $63,000 within hours, a decline of over 3%.
This ripple effect also led to more than a 5% dip in altcoins like Uniswap, Polkadot, and Bitcoin Cash.
Market sentiment became bearish as BTC’s price began to fall an hour before the first Mt. Gox transaction on July 16, continuing to decline as more outflows hit unknown wallets.
On July 5, Mt. Gox announced it would begin repaying its BTC and BCH debts to creditors, stating that the repayments would be made via designated crypto exchanges.
The announcement identified Mt. Gox Co. Ltd. as the Rehabilitation Debtor and Nobuaki Kobayashi as the Rehabilitation Trustee.
The statement indicated that the remaining rehabilitation creditors would receive funds “promptly” after fulfilling prerequisite conditions.
With over $9 billion in BTC outflows on July 16, the promise of prompt repayments might be realized before August.
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Creditors of the hacked cryptocurrency exchange Mt. Gox are not rushing to sell their Bitcoin payouts, according to a Reddit community vote.
A recent poll on the Mt. Gox Insolvency subreddit revealed that most Mt. Gox creditors plan to retain their Bitcoin payouts.
These payouts are being received nearly 11 years after the Mt. Gox hack.
Mt. Gox Insolvency is a subreddit for those affected by the 2014 collapse of Mt. Gox and participating in the official insolvency process in Tokyo through the Japanese court system.
According to the poll, which closed on July 13, approximately 260 creditors (56% of 467 participants) plan to hold onto their Bitcoin.
This decision aligns with the Bitcoiner strategy known as hodl, where investors hold onto BTC despite price fluctuations.
Conversely, 88 respondents (about 20%) indicated they would sell 100% of their BTC payouts. Around 14% said they would sell up to 25% of their BTC, while about 6% planned to sell up to 50%.
While the poll may reflect investor sentiment on the subreddit, it doesn’t paint the full picture.
Discrepancies in payout amounts and the fact that only a fraction of creditors participated in the vote are significant factors.
“This is all good fun, but doesn’t mean anything,” one Redditor commented, highlighting the variance in BTC holdings among creditors.
Another poster added, “You cannot take the results of this survey and calculate the percentage of Bitcoin that will be sold and be anywhere near accurate unless you get lucky.”
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Despite these limitations, some believe the polls are useful.
“The polls about receiving fiat from the trustee changed every week with the increased disbursement and showed how many creditors were compensated,” a Mt. Gox creditor told Cointelegraph.
Mt. Gox was once the world’s largest Bitcoin exchange, handling approximately 70% of all BTC transactions before its collapse in 2014.
The exchange lost 850,000 BTC (4% of all issued Bitcoin) in a security breach. Over the years, the Mt. Gox trustee has recovered about 141,000 BTC to repay creditors.
As of July 17, more than 36% of the owed BTC had been distributed. Over 13,000 creditors received repayments in Bitcoin and Bitcoin Cash as of July 16.
According to Mt. Gox Balance Bot, the trustee’s current balance is 47,228 BTC, worth about $3 billion. Since May 30, 94,457 BTC has been moved from these addresses.
Django Bits, the creator of Mt. Gox Balance Bot, noted that recent transactions to Kraken might require adjustments to the bot.
“Last week, the trustee sent a big chunk, but it turned out that most of it was sent to a change address,” he told Cointelegraph.
“I did not yet have time to check the movements but I might need to adjust the bot again,” he added.
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Following a recent court ruling in Illinois classifying Bitcoin and Ether as commodities, stakeholders in Nigeria are advocating for a similar approach from the Nigerian Securities and Exchange Commission (SEC) to enhance regulatory clarity.
This call for classification comes amidst the growing importance of cryptocurrencies in global finance.
Lucky Uwakwe, chairman of Nigeria’s Blockchain Industry Coordinating Committee (BICCoN), emphasized the necessity of defining crypto asset classes clearly.
In an interview with Cointelegraph, Uwakwe stressed, “The Nigerian SEC should make rules that define the asset class of crypto assets or break respective crypto into asset classes and explain how such crypto qualifies as securities or commodities.”
He noted the distinction made by the US SEC and the Commodity Futures Trading Commission (CFTC) regarding Bitcoin and Ether as commodities, while highlighting how protocols like proof-of-stake (PoS) or proof-of-work (PoW) could affect the classification of other crypto assets.
In Nigeria, however, the focus of the Commodity Board has traditionally been on physical commodities like agricultural products, with minimal attention given to digital commodities.
Oladotun Wilfred Akangbe, chief marketing officer at Flincap, a platform for African over-the-counter crypto exchanges, underlined the diverse nature of cryptocurrencies and the varied interest from Nigerian governmental bodies.
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“Cryptocurrencies like Bitcoin and Ethereum have become valuable commodities in global markets,” Akangbe remarked, advocating for distinct regulatory strategies tailored to these foundational cryptocurrencies compared to others.
Akangbe suggested that the SEC concentrate primarily on cryptocurrencies used for fundraising, such as initial coin offerings (ICOs).
Another local crypto analyst, Rume Ophi, argued for individual scrutiny of each cryptocurrency to determine its classification as a security or commodity, emphasizing their uniqueness.
These recommendations are pivotal as Nigeria seeks to establish a robust regulatory framework for digital assets.
By classifying Bitcoin and Ether as commodities, the Nigerian SEC can offer much-needed clarity and stability to the market.
This approach not only fosters innovation but also ensures adherence to regulatory standards.
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South Korea’s ruling People’s Power Party has proposed delaying the country’s tax on crypto trading profits.
On July 12, the party submitted the proposal, highlighting a negative sentiment towards crypto assets. The proposal stated that rapidly imposing taxes on virtual assets is “not advisable at this time.”
The party argued that crypto assets have higher risks compared to stocks, and imposing income tax could drive investors away from the market.
Originally, the tax on cryptocurrency gains was set to begin on Jan. 1, 2025. However, if the proposal is approved, the implementation will be postponed until Jan. 1, 2028.
As part of its campaign before South Korea’s general elections in April, the People’s Power Party promised to delay the crypto gains tax by two years.
On Feb. 19, the party emphasized the need to establish a comprehensive crypto framework before diving into taxation.
They stressed that crypto should only be taxed once a solid framework is in place.
A party representative pointed out that, unlike the stock exchange, there are no mandated entities to oversee crypto transactions.
Therefore, the party believes that spending two years to develop such a system is necessary.
The Korea Economic Daily reported that the plan to tax crypto gains was initially set to be implemented in 2021.
However, due to backlash from crypto industry leaders and stakeholders, the government delayed the tax implementation to 2023, and later to Jan. 1, 2025, to address investor concerns.
If the new proposal is accepted, the crypto gains tax will be delayed by nearly seven years from its original schedule.
Currently, South Korean investors must pay a 20% capital gains tax if their annual gains exceed 2.5 million won (approximately $1,800).
This threshold is much lower than that for stocks, where only gains exceeding 50 million won (about $36,000) are subject to taxation.
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During a recent CNBC interview, BlackRock CEO Larry Fink admitted he was “wrong” about Bitcoin, now recognizing it as “digital gold” and a “legitimate” financial instrument.
Speaking with CNBC’s Jim Cramer, Fink said, “I was a skeptic, a proud skeptic,” but his perspective changed after studying the decentralized asset.”
He acknowledged Bitcoin’s potential for uncorrelated returns, stating, “It is a legitimate financial instrument that allows you to maybe have uncorrelated type of returns.
“I believe it is an instrument that you invest in when you’re more frightened, though. It is an instrument when you believe countries are debasing their currency by excess deficits, and some countries are.”
Fink highlighted the economic and political instability in certain countries, suggesting that Bitcoin offers an alternative investment opportunity beyond local geographies for individuals in those regions.
In May, BlackRock’s iShares Bitcoin Trust (IBIT) surpassed Grayscale Bitcoin Trust (GBTC) to become the world’s largest Bitcoin exchange-traded investment fund.
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By July 15, IBIT’s year-to-date inflows had exceeded $18 billion.
The asset manager also incorporated shares of the Bitcoin ETF into its Strategic Income Opportunities Fund (BSIIX) and the Strategic Global Bond Fund (MAWIX), emphasizing Bitcoin’s potential benefits for income-focused investors, including retirees.
CoinShares’ most recent inflows data, released on July 15, showed that Bitcoin investment vehicles recorded their fifth-highest week of inflows, with over $1.35 billion invested in a single week.
Bitcoin’s price reacted positively to Fink’s comments and other bullish developments, including the German government selling its final Bitcoin holdings, which had been creating significant selling pressure by dumping 50,000 coins on the market.
The decentralized asset saw four consecutive days of gains, with the nine-day exponential moving average crossing back over the 200-day exponential moving average.
This technical movement reversed several weeks of negative price action, pushing Bitcoin back above the $60,000 mark.
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Bitcoin experienced a drop of over 3% on July 16 due to concerns related to the defunct exchange Mt. Gox.
Data from Cointelegraph Markets Pro and TradingView indicated that BTC’s price was under pressure after reaching $65,000 on Bitstamp.
The decline occurred as Bitcoin from Mt. Gox moved between wallets associated with its rehabilitation program.
Crypto intelligence firm Arkham reported that approximately 92,000 BTC (valued at around $5.7 billion) was transferred out of Mt. Gox’s cold wallet, constituting about two-thirds of the exchange’s total holdings.
“Mt. Gox moved 44,527 $BTC (2.84B) to an internal wallet 5 minutes ago, which may be preparing for repayment,” noted onchain analytics platform Look Into Bitcoin on X (formerly Twitter).
The impending distribution of refunds to Mt. Gox creditors, who originally lost their assets when the exchange was hacked and subsequently closed more than a decade ago, has historically impacted prices negatively.
Markets fear massive BTC sales as a result.
However, some argue that these fears are exaggerated. “And here is the next Bitcoin FUD,” remarked popular crypto investor and YouTuber Quinten Francois on X.
Cointelegraph previously reported that sell-side pressure affecting markets in recent weeks also stemmed from the German government, which had sold off its stocks of confiscated BTC, now depleted.
The disruption from these concerns interrupted what had been one of Bitcoin’s strongest performances in recent months.
BTC/USD had last reached $65,000 on June 21, a critical level reflecting Bitcoin’s short-term holder cost basis.
This cost basis, also known as realized price, serves as support during bull markets and was last breached in August 2023.
Look Into Bitcoin recorded the short-term holder cost basis at $64,835 as of July 15.
The resurfacing of Mt. Gox-related fears thus added to the already present market anxieties, influencing Bitcoin’s price movements and market sentiment.
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Bitcoin sentiment has dramatically shifted from “extreme fear” to “greed” and “FOMO” within just a few days, driven by a 12% gain over the last week.
On July 16, crypto analytics platform Santiment posted on X, advising caution amidst the sudden bullish trend.
They warned that investors should be careful when “the crowd has collectively become so bullish without many signs of fear.”
Santiment attributed the market’s optimism to investors favoring the potential election victory of Donald Trump and his crypto-friendly running mate JD Vance in November.
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During the period from July 13 to July 16, the Crypto Fear & Greed Index for Bitcoin sentiment flipped from “extreme fear” to “greed” as the crypto market rallied.
Bitcoin has surged by 12.8% in the last week, currently trading at $64,508, according to TradingView data.
Bitcoin exchange-traded funds (ETFs) have also shown strength, with eleven spot Bitcoin funds seeing net inflows of $300.9 million on July 15.
Leading the inflows were funds from BlackRock and Ark 21 Shares, each with $117.2 million on that day, as reported by FarSide Investors.
Bitcoin’s price rebounded from a July 5 low of $53,500, which followed significant sales by German government-linked entities and negative sentiment due to fears about $8.5 billion in BTC being returned to creditors of the collapsed crypto exchange Mt. Gox.
After Bitcoin surpassed the $62,000 mark, several analysts told Cointelegraph that an improving macro-environment suggests that the worst “is likely behind us.”
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Bitcoin-stacking investment firm Metaplanet has made a significant move by purchasing an additional 21.88 Bitcoin, valued at over $1.2 million (200 million Japanese yen), amid a recent Bitcoin rally that has driven prices close to $65,000.
In its latest purchase statement dated July 16, the Japan-based firm revealed that its total Bitcoin holdings now stand at 225.6 Bitcoin, valued at approximately $14.6 million.
This recent acquisition, coupled with a 4.4% rise in Bitcoin’s price over the last 24 hours, has led to a notable surge in Metaplanet’s share prices.
According to Google Finance data, the company’s shares jumped 25.8% to $0.74 (117 yen) within the first two and a half hours of trading on the Tokyo Stock Exchange on July 16.
Earlier this month, Metaplanet took advantage of a dip in Bitcoin’s price, purchasing an additional 42.46 Bitcoin on July 7 for $2.5 million (400 million yen).
This strategic move has contributed to the firm’s stock price soaring nearly six-fold since it announced its Bitcoin investment strategy on April 9, 2024.
Despite the impressive growth in its stock price, Metaplanet’s overall gain on its Bitcoin holdings is modest at 2.8%, given its average Bitcoin purchase price of $62,890.
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According to CoinGecko, Metaplanet is currently the 21st-largest corporate holder of Bitcoin globally.
Often referred to as “Asia’s MicroStrategy,” Metaplanet mirrors the investment approach of Michael Saylor’s MicroStrategy from 2020.
On May 13, Metaplanet reiterated its commitment to utilizing a full range of capital market instruments to enhance its Bitcoin reserves.
The firm adopted this strategy as a hedge against Japan’s escalating debt and the rapidly depreciating Japanese yen.
Since January 2021, the yen has depreciated nearly 54% against the U.S. dollar, while Bitcoin has appreciated over 145% against the yen in the past year.
Currently, Bitcoin is trading at $64,640, marking a 13.6% increase over the past week.
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