Today bitcoin prices on a steady march higher plus remember mount cox all that stolen bitcoin from eight years ago might be hitting the market soon and miners are selling crypto what is that signal for investors welcome to cnbc's crypto world i'm pippa stevens let's update everyone on price moves bitcoin crossing into the 20 dollar range ending up at twenty one thousand dollars by noon eastern it's been marching higher all week ether though down a bit in the past few days to hover around twelve hundred dollars after yesterday's big spike in the world of all coins polygon having a big week its matic token rose above 25 in the past seven days okay let's talk about today's top stories in crypto first up celsius is catching a lot of heat in a new lawsuit the crypto lender is facing allegations that it artificially inflated the price of its digital coin failed to hedge risks and basically ran a ponzi scheme that's according to allegations in a lawsuit from former investment manager jason stone filed in a new york state court celsius was not immediately available for comment on the lawsuit.
When contacted by cnbc celsius made money by offering high yields to crypto holders who deposited their digital assets with the firm it then lent out those deposits at a high interest rate celsius has been caught up in the liquidity crisis hitting the wider crypto industry stone's lawsuit accuses celsius of not having enough capital to repay older depositors and creditors because of big losses in its ether holdings allegedly celsius jacked up interest rates to attract new users in order to repay the older ones when crypto prices began to crash a few weeks ago celsius paused withdrawals because of quote extreme market conditions next up the federal deposit insurance corporation or the fdic for short is looking into collapsed crypto firm voyager digital according to bloomberg voyager is facing scrutiny that it deceived users into thinking it was insured by the fdic which is a consumer protection agency that ensures bank deposits voyager allegedly played up its relationship with crypto friendly firm metropolitan commercial bank the fdic told bloomberg that only metropolitan was insured not voyager.
Which went bankrupt last week and finally mount cox may seem like ancient history but it's now back in the headlines all right so eight years ago the japanese crypto exchange imploded after once holding about 80 percent of the world's bitcoin trades then it lost 850 000 of them about half a billion dollars back then its ceo went to jail in tokyo and only a fraction of the missing bitcoin has been recovered in the years since but some of those bitcoin holders may be getting paid back according to coindesk a lawyer involved in the mount cox rehabilitation case announced that they may start making repayments to former account holders who can accept outstanding funds in bitcoin bitcoin cash or regular old fiat currency a date hasn't been set for the repayments but some crypto investors are watching out for one and that's because since bitcoin was worth a lot less back when malcox imploded there's a concern that these recovered digital assets will flood the market once the payouts start up and cause even more volatility according to bloomberg the bankruptcy trustee holds about nine billion dollars worth of recovered bitcoin from mount gox all right on to our main story of the day crypto miners are turning into crypto sellers check out this chart from crypto quan it's showing the volume of bitcoin flooding markets after crypto miners offloaded them if the selling trend among miners continues then it could put more pressure on digital asset prices during the so-called crypto winter crypto world's tanaya mckeel spoke with crypto quantum giulio morano.
About the trend and how it might affect prices so the price of bitcoin fell to a low in june of somewhere around the 17 000 level and in that same month we saw that big spike in bitcoin miners who are moving some of their reserves to exchanges this minor capitulation we're calling it so what exactly does an event like that tell us well it tells us that miners profits are being squeezed on the one hand because of we have um lower bitcoin prices or their income their revenues are are lower and then for the other on the other hand we have um a higher difficulty of mining so their costs are are continue to be high so that's what how why their profits are being squeezed and you see miners um selling their their bitcoin reserves to to add up some some revenue and and be able to pay their expenses is it safe to assume that they are selling and do we know anything about why they're selling is it just because they're looking to take um you know some profit i know that you were looking at some metrics about how overvalued or undervalued the bitcoins are at these prices um or is it a case where miners are just looking to sell so that they're able to keep financing their own operations with i think i read something i know yesterday about the cost of processing or mining a bitcoin actually being about the same or more expensive than the price of bitcoin itself yeah so for some miners the price has gone uh up to the point that there is lower than their mining costs and we have seen this in you know these miners that are publicly traded there are have been announcing that they're selling some of their bitcoin reserves and so we think that is because of this uh profit squeeze and they need to finance their operations so they they sell their their coins uh to to have uh more more cash on hand and uh and we also see in this in in the data that we track we track um uh bitcoin that is moving from miners to exchanges and then this this kind of data had a spike a really important spike in the in during june and so we typically assume that this move of coins from miners reserves to exchanges.
Is to to sell their coins and we can actually see that to what extent is all of that selling adding to the overall crypto market or to the bitcoin network i know you're also tracking minor cell pressure what exactly are you seeing there and what does it say about the state of the bitcoin network today well the other the minor cell pressure is um indicator that we developed that uh tracks the cumulative flow from miners to exchanges during a specific period of time so when we saw this also spiking in in during june because miners uh uh selling their their bitcoins or um sending their bitcoins to exchanges and this typically has um you know implications for the market as as typically miners uh sell uh at the bottom of the of this of the market cycle or at the start of the bottom of the market cycle and we're seeing a sign of this in in this minor uh capitulation money selling pressure metric do you believe that that's what's happening now that we're at or near the bottom well it's it's difficult to say exactly you know the the macro environment is not specifically you know supportive of this but uh on on the other hand on on on the unchained data and the flow data itself is just telling us that there are some signs of that can you give us a little bit more context about this type of event so you're saying that on the one hand it might be the sign that we're at or near a bottom i guess when was the last time that we've seen an event like this happen in a meaningful way we have seen this um a few times during the bitcoin's history the most recent was at the at march 2020 when the pandemic hit and we saw this market sell-off uh as the price of bitcoin decreases almost 40 percent in just one day we saw also this type of spikes in and minor flows from from their reserves to exchanges um also we have seen this in the near the cycle bottoms of the market in 2019 and also in 2015 so and it's not just a you know a one-time event it could it could happen many times during the bottom but it's it's a it's a sign of of bottoming or has been and in the past a sign of bottoming on the flip side what is the worst case scenario in terms of what can happen next or a while from now if prices stay this low for an extended period even these low prices if you see the hash rate of the network it hasn't decreased a lot it's just decreased just about 10 percent and prices are down 70 so i guess from that stand point of view you know miners are still still operating still mining and these big companies these big miners they don't they don't shut down really quickly because they have to continue to operate they have contracts they have expenses they need to cover and they also have in place orders in place for new equipment already so it's not that easy just to shut down an entire operation.
Comments
Post a Comment