Bitcoin briefly attempted to test $60,000 resistance earlier this morning as traders continue to buy the dip and following an influx of $300 million back into Bitcoin ETFs. It has also emerged that the German state Saxony continues to move its Bitcoin balance around, transferring just over 10,000 BTC to exchanges Kraken and Coinbase, having previously taken $200 million of the crypto back from exchanges. Meanwhile, Ethereum continues to underperform Bitcoin as the market awaits news of the proposed new ETH ETFs.
Avoiding A Volatile Market
Bitcoin is known for its price volatility with swings of 5% to 10% a day commonplace. Even though it has seen greater stability in the past few months, buyers can still expect price swings.
For investors, that volatility can be profitable, but less so for those that use cryptocurrencies to pay for goods and services, develop dapps, or spend their money on crypto casinos. Crypto writer Michael Graw highlights several casinos that accept different cryptocurrencies, including tethered coins, which offer the same anonymity and privacy as Bitcoin but do not endure the volatility against fiat currencies, making them a safer alternative for use at online casinos.
ETF Inflows
Bitcoin saw a strong start to 2024, rising from $44,000 at the start of the year to a high of over $73,000 in March. The rise was fueled partially by the announcement and subsequent launch of Bitcoin Exchange Traded Funds (ETFs), which brought new investment from major financial investors into the market.
Since then, following news that a lot of the early ETF money has flowed out of the market and amid massive BTC movements from the U.S. and German governments as well as Mt. Gox bankruptcy trustees, prices have stuttered. BTC has repeatedly tested $70,000 resistance before falling to a four-month low of $55,000 at the end of the first week of July. While many analysts still expect BTC prices to fall to $50,000 resistance before any hope of a long-term recovery, the world’s largest crypto has seen investors buying the dip, pushing prices back up to $58,000 on July 10.
That dip led to more than $300 million of ETF inflow on July 8, marking the biggest day of ETF inflow in a month. BlackRock’s IBIT saw the greatest net inflow, with $180 million coming in.
Saxony BTC Movements
The market has also seen bullish sentiment following the news that the German state of Saxony has received more than $200 million of Bitcoin back from major exchanges. The wallet previously sent $900 million of BTC to exchanges, although they obviously didn’t sell all of these holdings.
Mt. Gox Impact
The price bounce is an indication that the market is getting used to the possibility of a massive selloff from the German wallet and is also an indication of similar sentiment towards the ongoing Mt. Gox selloff.
Mt. Gox was once the world’s biggest cryptocurrency exchange and dealt with more than 70% of all Bitcoin trades at one point. However, hackers stole approximately 900,000 Bitcoins from the exchange over a three-year period, forcing the site to go bankrupt in 2014. 200,000 of the coins were later recovered, but creditors have had to wait ten long years before they have seen any sign of their partial refunds.
In June, Mt. Gox trustees announced they would start sending payments out to creditors starting in the first week of June. When the payments started, the market reacted nervously, leading to July’s early price dip. The payments need to be completed by the end of October, 2024, and it is likely they will take months to complete, although there has been no official word of a timeline.
Ethereum ETFs
The market continues to wait for news of Ethereum ETFs. On May 23, 2024, the SEC agreed to the launch and listing of Ether ETFs, joining similar Bitcoin products. Various companies have submitted applications and had them knocked back, but VanEck and 21Shares have resubmitted their application forms. Both forms gave a vague launch date as being as soon as possible after successful application.
Although Bitcoin ETFs launched immediately after SEC approval, the same has not been true of Ether ETFs. This is likely because most experts expected the SEC to reject the prospect, meaning that acceptance took fund managers and investment companies by surprise.
Once Bitcoin ETFs launched, there was an initial influx of nearly $5 billion in the cryptocurrency, and investors are hoping for similar from Ether.
Although they are both classified as cryptocurrencies, Bitcoin and Ethereum have intrinsic differences. While Bitcoin has a limited supply, Ethereum can continue to produce which gives it an unlimited supply. Ethereum also has arguably greater utility than Bitcoin. Bitcoin is effectively used as a transfer of funds from one wallet to another. Ether is used by companies that build dapps on the Ethereum network.
Ethereum is the latest cryptocurrency to gain SEC ETF acceptance, but it may not be the last. 21Shares, which is hoping to have its most recent ETF application accepted, has already applied to the SEC for Solana ETF approval. Ripple ETFs are also likely to get the same treatment in the coming months.
What Next For BTC Prices?
Despite Bitcoin’s bearish start to the month, July is traditionally considered a strong month for the cryptocurrency with average 9% gains in past years. Analysts still expect to see similar this year, although many have warned that BTC prices are likely to drop to $50,000 before the recovery starts.
From there, many commentators believe the next stop for the digital asset is $100,000 with a target set for the end of the year. Although that’s a high price tag, an increase of less than 50% from June’s price is not an unreasonable expectation.
Conclusion
Although Bitcoin prices remain volatile, the wild swings that the market used to experience just five years ago, seem to have settled. The start of July has seen a lot of bearish news stories, involving selloffs from governments and whales, but the price has performed comparatively well.