Bitcoin Briefly Slips Below $60K, SEC Drops Ethereum Probe

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Key Takeaways

Bitcoin price continued its troubled month as it briefly fell below $60,000 on Monday.

Former bitcoin exchange Mt. Gox announced that distribution of funds owed to former customers will begin in early July.

The Securities and Exchange Commission (SEC) closed its investigation into Ethereum without filing charges against blockchain technology firm Consensys.

Crypto asset manager Hashdex has filed for a combined spot bitcoin-ether ETF.

This week, analysts will be watching to see if Bitcoin can halt its decline and will also be keeping an eye on Thursday’s US presidential debate.

June hasn’t been kind to Bitcoin: The cryptocurrency’s price briefly fell below the $60,000 level on Monday after looking like it might surpass its all-time high of $73,000 earlier in the month.

The latest negative news for Bitcoin comes from the defunct Bitcoin exchange Mt., which is estimated to have involved as many as 140,000 Bitcoins coming to market. It comes in the form of distributing Bitcoin owed to Gox’s former customers.

However, last week wasn’t all bad news for cryptocurrency, as the US Securities and Exchange Commission (SEC) concluded its investigation into Ethereum and blockchain technology firm Consensys without filing any charges. Separately, crypto asset manager Hashdex has filed for a spot crypto exchange-traded fund (ETF) that will focus on diversification.

Mt. Gox Refund Plan Causes Excitement in Bitcoin

Defunct bitcoin exchange Mt. Gox has announced that it will begin the long-awaited process of returning assets to its customers in July, more than a decade after it filed for bankruptcy following multiple hacking incidents. The total amount of bitcoin to be distributed remains unclear; estimates range from 65,000 to 140,000 bitcoins, potentially worth up to $9 billion.

While some investors worry that this influx of bitcoin could send prices lower, others argue that potential selling pressure may be exaggerated and note that creditors have years to sell their claims if they need funds urgently. The upcoming Mt. Gox refunds caused the Bitcoin price to briefly drop below $60,000 on Monday, continuing this month’s downward trend.

Spot bitcoin ETFs experienced their biggest outflows in a two-week period since the U.S. spot bitcoin ETFs were approved in January, with investors withdrawing a net $1.1 billion from these funds during that time, according to data from Farside Investors.

SEC Closes Ethereum 2.0 Investigation

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

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According to Consensys, the regulator began its investigation into Ethereum last year, and the company filed a lawsuit with the SEC earlier this year, claiming that Ether is a commodity and the SEC does not have jurisdiction to investigate.

While SEC chairman Gary Gensler did not strictly label Ethereum as a security, the Commodity Futures Trading Commission (CFTC) considers it a commodity. Closing the investigation could indicate that the SEC is moving toward treating ether as a commodity, although the SEC’s future actions remain unclear.

According to Fortune, Consensys’ legal battle with the SEC will continue despite the latest announcement. The conflict stems from the SEC’s review of Consensys-owned crypto wallet MetaMask, specifically its token swap capabilities and staking access. The SEC alleges that these functions constitute unlicensed brokerage activities involving unregistered cryptoasset securities. Consensys said closing the Ethereum 2.0 investigation was a win, but it did not fully address broader regulatory issues.

Hashdex Files for Combined Bitcoin-Ether ETF

With spot Bitcoin ETFs already trading in the US and spot Ethereum ETFs also appearing to be around the corner, the next development could be a combined ETF containing both leading cryptocurrencies. Hashdex, a crypto asset manager, is leading this effort with a recent filing for the Hashdex Nasdaq Crypto Index US ETF.

If approved, this ETF would be the first ETF in the US to directly hold both Bitcoin and Ethereum. According to Nasdaq’s filing with the SEC, the ETF will track the Nasdaq Crypto Index (NCI), which is weighted by market cap. Coinbase Custody and BitGo will provide custody services. The ETF aims to provide a passive investment strategy that allows investors to view the overall performance of the market. Hashdex already has a similar product in Brazil.

While the new ETF will initially focus on Bitcoin and Ethereum, the application leaves room for the inclusion of additional crypto assets in the future, provided they meet regulatory criteria. Bloomberg analyst James Seyffart stated that the SEC’s final decision on Hashdex’s application is expected in early March 2025.

What to Expect in the Markets This Week?

Crypto market analysts are particularly concerned about high Bitcoin ETF outflows and the upcoming Mt. Gox will be watching the Bitcoin price closely this week, waiting for signs that the bleeding will stop in the context of distributions.

However, some market observers, such as Caitlin Long, founder and CEO of Custodia Bank, say that the decline in Bitcoin prices in the context of the recent halving event is nothing to worry about. “It’s normal for such a price drop to occur after a halving; halvings are incredibly bullish, but bull markets typically don’t start until several months later for fundamental reasons,” Long shared on X.

All eyes will be on the US presidential debate between Joe Biden and Donald Trump on Thursday as conversations about cryptocurrencies gain momentum on the campaign trail.

Former President Trump has changed his stance on Bitcoin and now appears to support the cryptocurrency without making any definitive regulatory or policy comments for digital assets. Due to the SEC’s aggressive enforcement actions during his administration, President Biden is accordingly not viewed as crypto-friendly; It’s an image his campaign is trying to separate from him, but there are no details on his crypto policy on that side. anyone.

Read the original article on Investopedia.