Bitcoin plunged to $53,350 on the Bitstamp exchange, reaching its lowest point in five months at 4:19 UTC. This drop followed the transfer of a staggering $2.71 billion worth of Bitcoin by the now-defunct Mt. Gox cryptocurrency exchange into a new wallet. Last month, the exchange announced it would begin compensating victims of the 2014 hack, resulting in significant downward pressure on Bitcoin due to creditors’ selling spree.
However, banking giant JPMorgan recently forecasted that this selling pressure would not last long. The bank’s analysts predicted that Bitcoin prices would start to recover by late summer. According to JPMorgan, some creditors might retain their coins either for tax reasons or in anticipation of future price increases.
Beyond the Mt. Gox distributions, Bitcoin prices have also been heavily impacted by a sell-off instigated by the German government. Joanna Cotar, an independent member of the German parliament, recently called on the government to halt its cryptocurrency sales, emphasizing Bitcoin’s diversification benefits among other key advantages.
Data from the cryptocurrency analytics platform Santiment indicated historically high levels of fear, uncertainty, and doubt (FUD) on social media, based on the frequency of “sell” mentions. Despite this, Hunter Horsley, CEO of Bitwise Invest, remains convinced that the recent price collapse has not changed the fundamental value of Bitcoin. In a post, he stated, “Price has been an unhelpful metric lately. Keep calm and carry on.”
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