The drop of Bitcoin below $39,000
Bitcoin (BTC) fell below $39,000 during European business hours, losing almost all the gains it had made in the past two months amid expectations of approval for spot exchange-traded funds (ETFs) in the United States. BTC dropped by approximately 5% in the last 24 hours, reaching its lowest level in two months. The CoinDesk 20, which represents the liquid index of the highest tokens by market capitalization, fell by 7%. According to CoinDesk, part of the selling pressure on Bitcoin extends from the past few weeks, including the sale of approximately 22 million shares of Grayscale's GBTC by FTX, which is in bankruptcy.
CryptoQuant, an on-chain analysis firm, was one of the voices suggesting that the approval of the ETF would be a "sell the news" event. The term "sell the news," popular in capital markets, describes a scenario where asset prices rise due to anticipation and sensitivity, only to decline shortly afterward. Analysts from the Japan-based crypto exchange bitBank told CoinDesk that the approval of spot Bitcoin ETFs in the U.S. was well priced in and that the development was likely to be a "short to medium-term peak for the price."
The local token FTT of the bankrupt crypto exchange FTX deviated from the market trend after CoinDesk reported the sale of 22 million shares of Grayscale's GBTC bitcoin ETF from FTX's bankruptcy estate. Data examined by CoinDesk indicates that FTX played a significant role in this sell-off. The value of the 22 million shares FTX sold, reducing its ownership of GBTC to zero, was close to 1 billion dollars. While FTT tokens have been a speculative instrument since the collapse of FTX, plans for the relaunch or creditor repayments have previously led to short-term price increases. According to CoinGecko data, FTT trading volumes increased from 22 million dollars on Sunday to 90 million dollars.
On Monday night at a rally in Laconia, New Hampshire, Donald Trump reiterated his opposition to central bank digital currencies (CBDCs) and referred to former Republican candidate Vivek Ramaswamy. Trump said, "Vivek said this: I will never allow the creation of a Central Bank Digital Currency." He also pointed out earlier that the digital dollar posed a dangerous threat to freedom and provided the federal government with absolute control over people's money. Digital assets have not been a major issue in the 2024 U.S. presidential race, but they have continued to be a secondary topic of interest. However, with recent changes in candidates, their importance in discussions may diminish further.
