Markets
Why is Bitcoin down? Crypto Selloff Sends BTC Price to 6-Week Low
Top line
Bitcoin plunged on Monday to its lowest price since May 13, extending the mid-year sell-off, dampening the top cryptocurrency’s strong returns following January’s historic approval of spot bitcoin exchange-traded funds.
The month of June was bad for bitcoin.
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Key facts
BItcoin was down more than 4% as of 2 p.m. GMT, or 10 a.m. ET, trading at around $61,550, recovering slightly from its six-week low of $60,827 set on Monday (price movements crypto assets are typically measured in GMT, as digital assets are traded constantly).
Bitcoin fell 9% in June but remains up 45% year-to-date, with gains largely concentrated around ETF approval.
The recent losses were apparently catalyzed by early selling linked to the long-shuttered Japanese exchange Mt. Gox. imminent return of almost US$9 billion in bitcoin to creditors and the German government reported selling hundreds of millions of dollars in cryptocurrency.
Other cryptocurrencies also fell on Monday, with Ether, Binance Coin and Solana falling 3.5% or more.
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Amazing fact
Bitcoin withdrawals from cryptocurrency exchanges outpaced deposits by $522 million from Wednesday to Sunday, according to data from FactSet, indicating that several Bitcoin holders are cashing out their investments.
Crucial quote
“Crypto bears have become louder again,” Bernstein analysts Gautam Chhugani and Mahika Sapra wrote to clients on Monday. “After months of Bitcoin ETF euphoria, the market suddenly looks bearish,” continued the Bernstein group, which maintains a highly optimistic price target of $200,000 for bitcoin, expecting prices to more than triple.
Main fund
Bitcoin prices have risen nearly 300% since late 2021, with many of their gains stemming from enthusiasm about spot bitcoin exchange-traded funds. ETFs were a crucial step towards bitcoin’s entry into the mainstream market, as legacy money managers such as BlackRock and Fidelity created low-fee funds for investors to invest directly in the price of bitcoin through typical brokerages, without having to go to crypto exchanges to directly get buy bitcoin. Bitcoin is by far the most valuable cryptocurrency with a market capitalization of $1.2 trillion.