Each time the price of bitcoin has seen its price decline in June, the largest cryptocurrency by market cap would recover in the following month—typically by double digits.
According to data from crypto derivative statistics platform Coinglass, leaving this year aside, BTC has had five Junes in which its price had a negative performance: 2022, 2021, 2020, 2018, and 2013. After the June drawdowns, BTC rallied more than 9.6% in each of those five years, sometimes as high as 24%.
Zooming out, the median return for BTC for all Junes is -0.49%, while BTC’s median July return is 9.6%. At press time, BTC has dropped about 9% from around $67,700 at the start of June to as low as $58,400 before settling around roughly $61,700, per TradingView.
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Lack of New Capital
The price decline of BTC comes as traders are dealing with several market forces, namely the lack of new capital in the crypto ecosystem and selling pressure bolstered by the German government and Mt. Gox bankruptcy disbursements.
“The crypto market has entered an exhaustion phase,” wrote Decentral Park Capital portfolio manager Kelly Ye in a newsletter published Monday. “The lack of fresh capital into crypto is reflected in the slowdown in stablecoin supply.”
The total market cap of all fiat-backed stablecoins such as Circle’s USDC and Tether’s USDT has remained at $149 billion since May, after growing each month from $122 billion on Jan. 1, 2024, per CoinMarketCap.
German Government and Mt. Gox Sell Pressure
Not only has the lack of new capital coming into crypto played a role in BTC’s negative price movement, but the German government has also sent almost $220 million worth of BTC to various exchanges in the past seven days, a sign that the German authorities are selling, according to blockchain analytics firm Arkham Intelligence.
Additionally, Mt. Gox, the bitcoin exchange that filed for bankruptcy in 2014, will begin $9 billion worth of BTC repayments in July to its creditors, sparking fear that the long-awaited disbursements may add selling pressures in the market.
BTC declining “yesterday [however] wasn’t just about the Mt. Gox overhang – [the] news of the distributions was not a surprise, and while likely sell pressure could act as a BTC lid in the coming months, it’s unlikely to actually trigger a drop such as what we saw,” tweeted crypto-macro analyst Noelle Acheson, referencing BTC’s drop on Monday from $63,000 to around $58,400, data from TradingView shows.
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Diamond-Handed Mt. Gox Creditors
“We are not going to see a dump of $9bn since not all claimants will sell, and the distributions are unlikely to be all at once… There will be some sell pressure, but distributed and most likely less than many expect,” Acheson added.
In a similar vein, the head of research at Galaxy, Alex Thorn, argues that individual Mt. Gox creditors are likely to “be more diamond-handed than the market expects.”
Diamond hands refer to the qualities of people who have the will to hold rather than sell their cryptocurrencies in times of volatility.
According to Thorn, Mt. Gox creditors are tech-savvy, long-term bitcoiners, who have also “resisted years of compelling and aggressive offers from claims funds, suggesting they want their coins back rather than a USD-denominated payout.”
“Fewer coins will be distributed than people think and that will cause less #bitcoin sell pressure than market expects,” Thorn noted.
Potential ETH Rotation
The price of BTC sliding during the end of June coincides with the expected rollout of several spot ether exchange-traded funds (ETFs) at the beginning of July.
As a result, “we could also be seeing some rotation into ETH in expectation of outperformance in the run-up to launch,” Acheson said. Bitcoin’s recent price movement is about “macro jitters, and about possible ETH outperformance in coming weeks.”
