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Weekly Update: 10th of July

Hodl Team
Hodl Team
10 July 2024
Welcome to our weekly update, where we provide insights into the latest developments in the digital assets market.

What happened between the 3rd and the 10th of July?

  • Bitcoin dropped to ~$54,000, a level not observed since February 2024. The market experienced a correction as Mt.Gox started repaying its creditors while the German government started cashing out confiscated Bitcoin. Read more

  • Five US asset managers submit amended registration statements for their spot Ethereum ETFs. Read more

Bitcoin drops to $54,000

Last week, Bitcoin saw increased volatility due to various unfolding developments. In June, Mt.Gox, the collapsed exchange, announced that it would start repaying 140,000 Bitcoin to creditors who had waited over for a decade. Although the market was prepared for potentially increased selling pressure, fear entered when various transactions were sent out of Mt.Gox’s wallet. Although the majority of the assets remained in the wallet, investors sold their holdings to mitigate potential losses. However, this fear intensified when on-chain data indicated that the German government started to sell its Bitcoin holdings.

In January 2024, the news broke that the German government had confiscated 50,000 BTC from the film piracy site Movie2k which operated between 2009 and 2013, and decided to sell the Bitcoin this month. The government quickly transferred over $269 million worth of Bitcoin to various exchanges. This potential increase in selling pressure caused more investors to sell their holdings, creating a snowball effect that led to hundreds of millions of dollars being liquidated and declines across Bitcoin and the broader digital asset market.

As the week progressed, Bitcoin stabilized at $53,500 and began an upward trend, reaching approximately $58,000. However, on Monday, July 8th, Bitcoin experienced another retracement when the government sent over 15,000 BTC ($866 million) to market makers and exchanges. Subsequently, 2,480 BTC ($139 million) was transferred back to the German government from various exchanges, though market observers have yet to determine the reason for this return transaction. The German government still holds 26,318 BTC, worth around $1.5 billion, so selling pressure may persist. However, we believe its impact will lessen as the market becomes less reactive to recurring news.

VanEck and 21Shares refile for the Ether spot ETF

On July 8th, asset manager VanEck became the first ETF issuer to submit an amended registration statement for its Ethereum spot ETF. This was swiftly followed by 21Shares and Grayscale, which filed two amendments: one for the Grayscale Ethereum Trust, holding $28 billion worth of Ether, and another for a lower-cost alternative. As the day progressed, amendment filings from Franklin Templeton, Fidelity, and BlackRock were also submitted. Notably, none of the filings included planned fees, which, according to Bloomberg ETF analyst Eric Balchunas, is because the SEC hasn’t required this. Balchunas expects one more round of updates, this time with fees included before the financial instruments can start trading.

In other digital assets news

  • Traditional finance institutions Fidelity and Sygnum partner with Chainlink to publish NAV data of Fidelity’s $6.9 billion Institutional Liquidity Fund accessible on-chain in real-time.

  • Blockchain Artificial Intelligence protocol Bittensor temporarily halts its network after a potential private key breach, over $8 million worth of TAO tokens were stolen.

 

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