Bitcoin Slumps Below $63K, Altcoins Rekt, as Crypto Succumbs to Risk Off Mood

Even Bitcoin’s {{BTC}} attempt at a modest rally during U.S. trading hours on Friday was quickly snuffed out, with the price down nearly 4% in the past ninety minutes amid a major decline in equity markets.

A weak July U.S. jobs report early Friday sent bond yields and the dollar lower — the kind of action that typically sends risk assets like stocks and bitcoin into the green, but that’s not the case today. As of midday in the U.S., the Nasdaq was down 3.1% and the S&P 500 was down 2.7%, led by an 11% post-earnings slide in Amazon (AMZN) and a 5% drop in Nvidia (NVDA). The Volatility Index (VIX) is up a full 54% today.

Bitcoin managed to make a small gain above $65,000 at one point but succumbed to risk aversion, falling to $62,900 at press time and is down about 2% in the past 24 hours. The broader CoinDesk 20 Index is suffering even more, down just under 3%. Others moving lower include ether {{ETH}}, solana {{SOL}}, uniswap {{UNI}} and chainlink {{LINK}}, each down 4-5%.

Even before the U.S. jobs report, the ongoing decline in Japan added to the gloom, with the Nikkei falling 5.8% on Friday after falling 4%+ a day earlier. The sell-off appears to be in response to the Bank of Japan’s minimal monetary tightening actions on Wednesday, which raised its benchmark credit rate to 0.25% from a previous range of 0%-0.1%.

Genesis Trading bankruptcy looms again

Adding to the bearish move was the movement of 16,600 bitcoins (about $1.1 billion) and 166,300 ether (about $521 million) from wallets linked to the bankrupt Genesis Trading. According to Arkham Intelligence, this movement is likely for in-kind payments to creditors.

Indeed, at least one creditor contacted X to announce that he had received a modest distribution from the bankrupt Genesis estate.

This morning, after nearly two years, I received a small distribution from the bankrupt estate of Genesis Capital.

I will hang a photo of this on my wall as a permanent reminder to monitor and minimize counterparty risk.

— Robert Leshner (@rleshner) August 2, 2024

With the German government selling 50,000 Bitcoin in early July, distributions starting from the failed exchange Mt. Gox, and the impending sale of the U.S. government’s BTC stockpile, the Genesis action can now be added to the growing list of supply shocks in the cryptocurrency market.