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Bitcoin’s price continued its downward spiral on Thursday, largely unmoved by reports that the U.S. Securities and Exchange Commission (SEC) might soon approve Ethereum-based exchange-traded funds (ETFs). Instead, fears of a massive sell-off stemming from the defunct exchange Mt. Gox, coupled with a strengthening dollar amid inflation concerns, weighed heavily on the cryptocurrency.
Mt. Gox Liquidation Looms Large
Liquidators for the defunct exchange, which suffered a massive hack in 2014, announced plans to begin distributing stolen crypto assets – primarily Bitcoin and Bitcoin Cash – to their rightful owners as early as July. This prospect has triggered anxiety among traders, who anticipate that recipients of the now-valuable Bitcoin will likely choose to cash in, flooding the market with a substantial supply and potentially driving prices down further.
Adding to the bearish sentiment is the anticipation of the upcoming U.S. Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred inflation gauge. A higher-than-expected reading could bolster the case for continued interest rate hikes, further strengthening the dollar and putting downward pressure on Bitcoin and other risk assets.
Bitcoin’s Recent Struggles
Bitcoin has been in a slump, falling 1.1% in the past 24 hours to $60,918.7. This latest decline follows a significant rout over the past week, driven in part by the Mt. Gox liquidation fears and broader concerns about tighter monetary policy globally.
The Road Ahead
The next few weeks will be crucial for Bitcoin’s trajectory. The start of the Mt. Gox asset distribution, coupled with the release of the PCE inflation data, could significantly impact the cryptocurrency’s price. Meanwhile, the potential approval of Ethereum ETFs could provide a glimmer of hope for the broader crypto market. However, the looming threat of increased regulation and ongoing macroeconomic uncertainty suggest that Bitcoin’s path to recovery may be a bumpy one.
