Today’s edition of the weekly recap: Bitcoin (BTC) drops to a five-month low amid a series of whale selloffs; Mt. Gox begins creditor repayments; and Circle secures first stablecoin license under MiCA as regulatory efforts mount.
Market downtrend
- Following a bearish June, reports from July 1 suggested that Bitcoin could be poised for recovery in July. This was based on historical performance and a good start to the month.
- However, Bitcoin’s run came to a halt when it reached a one-week high of $63,861 on July 1. Bitfinex analysts confirmed that BTC had diverged from the currently bullish U.S. equities, as it fell below $63,000 and failed to reclaim the level.
- Glassnode stressed that Bitcoin was in an indecisive phase amid bearish pressure. BTC witnessed three consecutive intraday declines, dropping below $59,000 on July 4 as signs of miner capitulation emerged.
Bitcoin hits 5-month low
- Despite the downtrend, Core Scientific founder Darin Feinstein remained bullish, stressing that BTC was undervalued. Bitcoin continued to record lower lows, dropping below $57,000 on July 4 and triggering selloffs among new holders.
- A combination of miner capitulation, whale exchange deposits, selloffs from the German government and Mt. Gox repayments exerted more bearish pressure on BTC, eventually leading to a 5-month low of $53,485 on July 5.
- The Bitcoin slump affected the broader market, leading to losses for the altcoin market. In addition, Bitcoin mining stocks also witnessed considerable declines.
Meme coins rally
- Following the downturn, Bitcoin looked to recover, reclaiming $58,000 on July 6. However, while the firstborn crypto’s strength soon failed, meme coins recorded more robust recoveries.
- Market data confirmed that BONK, dogwifhat (WIF), PEPE and BRETT all recorded gains of more than 15% over 24 hours on July 6. Meanwhile, BTC has receded back below $58,000.
- Last week also saw relatively low crypto funding activity, primarily due to the July Fourth holiday in the U.S. Yet, Sentient, an artificial intelligence (AI) research organization, collected an impressive $85 million in seed funding. Several other startups raised venture capital, too.
German government’s distribution campaign
- The market crash was due to multiple factors bordering on selling pressure. Data from Lookonchain revealed that the German government had continued to distribute part of the 50,000 BTC seized from the defunct piracy platform Movie2k.
- The government has moved Bitcoin daily since July 1, sending out 7,070 BTC tokens last week, a trend that compounded pressure on the market. The German government now holds 39,826 BTC during this press.
- On July 4, Tron founder Justin Sun disclosed his willingness to purchase the German government’s BTC off the market to reduce the selling impact. Also, German legislator and Bitcoin advocate Joana Cotar charged the government to stop the BTC sales.
- Meanwhile, the U.S. government, which holds a larger amount of Bitcoin, distributed some of its holdings last week, amounting to 274 Bitcoins.
Mt. Gox begins repayments
- The Mt. Gox repayments also contributed to the selling pressure. Mt. Gox, which recently announced plans to begin repayments this month, carried out a series of test transactions on July 4, confirming intentions to move their assets.
- On July 5, the collapsed exchange transferred 47,228 BTC to a new address in preparation for the repayment. Creditors eventually confirmed that the repayments had begun as of July 4, with reimbursements in BTC and Bitcoin Cash (BCH).
Circle secures stablecoin license under MiCA
- With MiCA’s stablecoin legislation in full swing, Circle received a license to provide stablecoin services around USDC under the new law across the European Union, making it the first stablecoin issuer to procure this licensing.
- The central bank of Russia might consider the legalization of stablecoins to leverage them for trade with China.
Other regulatory developments
- The European Banking Authority (EBA) confirmed the expansion of its guidelines around Travel Rules to cover firms providing services on crypto. This move, which will take effect from Dec. 30, is an attempt at bolstering AML procedures.
- In the U.S., a judge approved a motion from Ethereum development firm Consensys to expedite the timeline of its legal case against the SEC.
- Mike Novogratz, founder and CEO of Galaxy Digital, argued that the U.S. crypto industry would secure the much-needed regulatory clarity regardless of who wins the forthcoming presidential election.
