Bitcoin (BTC) has changed a lot in the last few months, but US stocks have been going up. There isn’t enough demand and there are too many goods on the market.
The most valuable coin on the market has lost more than 20% of its value since June, when it was worth more than $70,000 at its peak.Bloomberg reports that the 90-day link coefficient between Bitcoin and the Nasdaq 100 index dropped to 0.21 on Tuesday.
This is the lowest level it has been since early May. It’s been two months, and the group has dropped by more than half. Some people who work in the market say that this difference is caused by a number of unique supply events that have happened in Bitcoin.
Bitcoin faces spot sales
Joshua Lim is co-founder of the trading company Arbelos Markets. He says that Bitcoin is still working out how to deal with the effects of the spot sales of blocked BTC held by the US and German governments over the past month, as well as the distribution of funds from the Mt. Gox Bitcoin exchange, which is no longer in business.
The fact that Mt. Gox managers have started to return about $9 billion worth of tokens to creditors has sped up Bitcoin’s fall since March, when it hit an all-time high of $73,700. In January, German officials stole 50,000 BTC from a hacker website and sold more than half of it. This made people even more eager to sell last month.
An expert at Julius Baer named Manuel Villegas says that the coming supply overhang is the main thing that is making the market less trusting. Villegas says a lot of Bitcoin miners want to sell tokens because they aren’t making as much money as they used to.
These people are in charge of keeping Bitcoin going. The “halving” event in April cut the number of new tokens they get for their work, and now they have to deal with the cash effects of that. There are miners who are selling some of their BTC stocks to pay for the costs of running their businesses in regular money.
An analysis company called CryptoQuant says that the number of miners giving up is the same as it was in December 2022, with a 7.7% drop in hashrate. This is similar to what happened after FTX went down.
Bloomberg says that companies’ total cost of production is about $54,500 per year. People who mine might have to sell some of their tokens when prices drop below this level in order to pay for the costs of running their businesses.
Finally, the Mt. Gox distribution, the large number of seized coins, and the pressure on miners to sell have made buyers less sure, which has slowed down BTC’s price rebound even more.
