Here’s Why Bitcoin And Ethereum Price Crashed

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As a seasoned researcher with a background in financial markets and cryptocurrencies, I have witnessed my fair share of market turbulence and volatility. However, the recent events surrounding Genesis Global Capital’s creditor repayments have left me both intrigued and concerned.

Over the weekend, there was a significant drop in the total value of all cryptocurrencies, causing prices to plunge sharply. This decline was striking because Bitcoin, the most valuable cryptocurrency, dropped below $60,000 on August 3rd, while Ethereum, the second-largest, suffered significant losses and dipped below $3,000, reaching a low of $2,860. This downturn led other cryptocurrencies to also experience losses, with most showing immediate signs of red.

As a crypto investor, I’ve come to expect the rollercoaster ride that is the cryptocurrency market, with prices frequently surging and plummeting due to a multitude of factors. These sudden shifts are usually sparked by the market’s response to recent news or events. In this particular case, the recent downward trend can be traced back to repayment plans announced by the bankrupt crypto lender, Genesis Global Capital.

Genesis Moves $1.5 Billion In Crypto

After a three-year restructuring period, Genesis Global Capital – a bankrupt crypto lending company – is now actively repaying its debt to creditors. As reported by Bloomberg, the lender has initiated an immediate distribution of approximately $4 billion in both digital and traditional currencies to its creditors.

As an analyst, I can share the following distribution breakdown: I stand to receive approximately 51.28% of my Bitcoin claims, 65.87% of my Ethereum claims, and just 29.58% of my Solana claims based on current data.

Here’s Why Bitcoin And Ethereum Price Crashed

On Friday, Genesis transferred approximately $1.5 billion in Bitcoin and Ethereum, causing a ripple effect in the market. This transfer consisted of 16,600 BTC (approximately $1.1 billion) and 166,300 ETH ($521.1 million), as reported by Arkham Intelligence’s on-chain data. Among the recipients was billionaire Mark Cuban, who received around $19.9 million in Ethereum as repayments.

BREAKING: GENESIS MOVING $1.5B BTC + ETH FOR CREDITOR REPAYMENTS
In the last hour, wallets associated with Genesis Trading have transferred approximately $1.1 billion worth of Bitcoin (16.6K BTC) and about $521.1 million worth of Ethereum (166.3K ETH). It is probable that these transfers were made as in-kind repayments to creditors.
BTC: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmux
ETH:…
— Arkham (@ArkhamIntel) August 2, 2024

Market Reaction

In my analysis, it appears that numerous investors appeared to anticipate an influx of fresh funds by offloading their investments. This mass selling action contributed significantly to a noticeable decrease in the prices of several cryptocurrencies that were already facing challenges. Additionally, the price dip could be linked to long-awaiting creditors deciding to liquidate their digital assets, which they’d held for three years. This additional selling pressure only intensified the downward trend and aggravated the price drop.

In my analysis as a cryptocurrency analyst, I observed a significant dip in the market within a 24-hour span, with the total value dropping by approximately 5.7%. This decline has brought the current market capitalization down to an estimated $2.15 trillion. Notably, Bitcoin fell below the $60,000 threshold, and Ethereum dipped below the $2,900 level.

Apart from Genesis Global Capital, it’s important to note that Mt. Gox, another bankrupt crypto company, has been making creditor payments over the last few weeks as well. This trend of distributing funds could potentially influence market reactions, given that creditors are still receiving their repayments.

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2024-08-04 22:12