Concerns about oversupply

Bitcoin falls to its lowest level since February

At the beginning of June, Bitcoin still cost just under 72,000 dollars (66,667 euros).

(Bild: diy13 - stock.adobe.com)

Bitcoin fell significantly in early trading on Friday. At times, the price fell below the 54,000 dollar (50,000.00 euros) mark, its lowest level since the end of February. 

At 54,025 dollars, the price was recently almost 8.3 percent below the previous day's level. The oldest and most important digital currency has been under pressure for weeks. At the beginning of June, Bitcoin was still trading at just under 72,000 dollars (66,667 euros). Other digital currencies such as Ethereum, BNB and Solana also fell significantly in value. According to Coinmarketcap.com, the market capitalization of all cryptocurrencies recently fell by just over eight percent to 1.99 trillion dollars.

Bitcoin treasure believed to be lost has been unearthed
Experts attributed the losses in Bitcoin and other cryptocurrencies on Thursday and Friday morning to an announcement by the insolvency administrator of the failed crypto exchange Mt.Gox. The exchange had announced that it would hand over a large number of Bitcoin tokens (BTC) to aggrieved creditors. The aggrieved parties have been waiting for years for their coins to be refunded. This could lead to a glut of supply.

After the collapse of the exchange in 2014, users lost a total of 850,000 BTC. Of these, 142,000 BTC were recovered and are now to be handed over to their owners. The marketplace in Tokyo was the world's largest trading platform for the digital cryptocurrency in the early Bitcoin era. At the end of February 2014, Mt.Gox filed for bankruptcy following a hack, plunging the currency into its first major crisis of confidence.

Concerns about Bitcoin oversupply
It is unclear how former Mt.Gox customers will now behave. If a significant number of them want to sell the rescued Bitcoin holdings in the short term, this would lead to an oversupply of Bitcoin on the market. However, the market observers at Glassnode have not yet recorded any major BTC transfers.

Concerns about a Bitcoin oversupply are also fueled by the fact that law enforcement agencies are sitting on large BTC holdings that they have secured from criminals. The State Office of Criminal Investigation of the German state of Saxony alone confiscated around 50,000 Bitcoin in January in the context of investigations into the illegal movie-sharing platform Movie2k.to. The Federal Criminal Police Office is also said to regularly exchange seized BTC holdings for traditional currencies such as euros or dollars.

Waiting for Fed decision
The generally poor sentiment on the crypto market in recent weeks is also linked to the US central bank, the Federal Reserve. It is currently unclear when and to what extent the Fed might loosen its monetary policy. The calculation here is that as long as interest rates are comparatively high, investors have many options for investing their money profitably. The crypto market then suffers as a result. If, on the other hand, interest rates for traditional investments fall, crypto investments appear more attractive.