A significant drop in Bitcoin’s value under $60,000 alongside a substantial slump in equity markets encapsulates the turbulent week for cryptocurrencies. Adding fuel to the fire was the circling of approximately $2 billion of Bitcoin and Ethereum in wallets associated with Genesis Trading. This overall drop exceeded 11% over the past week, indicating the fruitlessness of attempts at even a modest early rally.
The disappointing July U.S. jobs report further stirred the storm, causing a significant dive in bond yields and the dollar. Such economic downturns typically propel risk-prone assets like stocks and Bitcoin, but the reverse was observed this time. The plunging 3.1% of the Nasdaq and 2.7% of the S&P 500, aggravated by an 11% decline in Amazon’s post-earnings and a 5% decrease in Nvidia, affirmed the grim market scenario.
On the brighter side, Bitcoin did momentarily surmount a minor gain past $65,000, only to be dragged back to around $60,000 within the next 48 hours, reflecting an almost 8% fall. Altcoins like Ethereum, Solana, Uniswap, and Chainlink took much heavier hits, registering falls between 10% and 22% within the week.
The gloomy market mood was set even before the U.S. jobs report, with the Nikkei in Japan experiencing a significant 5.8% fall on Friday, courtesy of the Bank of Japan’s minuscule tightening actions on Wednesday.
Adding to this bleak scene was the movement of 16,600 bitcoin ($1.1 billion) and 166,300 ether ($521 million) from wallets associated with the bankrupt Genesis Trading. According to Arkham Intelligence, this move is likely a means of repayment to creditors. The addition of such transactions exacerbates the supply shocks the crypto market has been experiencing following the German government’s massive sale of 50,000 bitcoin earlier in July, and the impending sales from the U.S. government’s Bitcoin stash.