Cryptocurrency Exchange Creditors Recover $4 Billion

Bitcoin Price Briefly Drops Below $63,000 Amid Market Risk Aversion

The price of Bitcoin briefly dropped below $63,000 amid a general aversion to risk in financial markets.
This coincided with the start of Genesis’ distribution of crypto assets to creditors following a restructuring tied to bankruptcy protection.

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Details
Bankruptcy Protection
Factors Affecting Bitcoin
Continued Decline

Details

The largest cryptocurrency fell by 3.5% to $62,411 following the U.S. employment report for July,
which raised concerns that the world’s largest economy might be heading towards a recession.
Smaller and less traded cryptocurrencies like Solana and Cardano fell by even larger percentages.

Dan Dolev, senior analyst at Mizuho Securities, explained that Bitcoin does not serve as a safe haven as many hope.
He added, “In case of rising unemployment and people losing their jobs, they will have to sell their crypto tokens.”

Bankruptcy Protection

Genesis announced that it has started distributing approximately $4 billion in crypto assets and dollars to creditors under a Chapter 11 bankruptcy protection plan. Blockchain analytics firm Arkham noted that crypto wallets associated with Genesis Trading transferred about $1.4 billion worth of Bitcoin and $520 million worth of Ethereum today.

Cryptocurrency markets have been negatively impacted in recent weeks due to fears that many crypto tokens will enter the market simultaneously, exceeding investor demand. The trustee overseeing the bankruptcy process of Mt. Gox exchange has started distributing crypto tokens to creditors, and the German government has begun selling cryptocurrencies seized from criminal activities.

Factors Affecting Bitcoin

Analysts noted that Bitcoin has also been subject to increased volatility due to the U.S. presidential elections, considering its potential position as a safe asset and a key pledge of Republican candidate Donald Trump’s campaign. Matthew Graham, founder and managing partner at Ryze Labs, pointed to several factors currently affecting Bitcoin’s price, including the possibility of interest rate cuts, Trump’s potential victory in the upcoming presidential elections, and the potential impact of redefined cryptocurrency policies if Kamala Harris wins.

Continued Decline

Bitcoin has already experienced a continued decline from the $70,000 level
in the days leading up to yesterday’s U.S. Federal Reserve meeting,
where policymakers chose to hold interest rates steady.
This indicates that cryptocurrency markets may expect a broader market decline before rate cuts occur,
according to Liyue Yang, chief economist at BIT Mining.

Yang added, “The market is entering a risk-averse phase as investors seek safe havens.
Bitcoin is currently more significant among mainstream investments in this category compared to before,
with the maturity of exchange-traded funds and the sector’s regulatory landscape.”
However, the volatility of the crypto token shows that such signals cannot be fully relied upon.
Yang concluded, “Overall, the availability of hot money liquidity in the market is still insufficient to support a full-fledged bull market, which may be achieved with accumulated interest rate cuts.”

Cryptocurrency Exchange Creditors Recover $4 Billion

Cryptocurrency Exchange Creditors Recover $4 Billion

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