Since May, Bitcoin and altcoins has suffered huge losses. Things started to change after some time. The bitcoin price dropped to $17K, but it recovered quickly to trade between $20K-$21K during the period June 19 to June 28, and then traded over $21K at the beginning of the morning.
The recovery of crypto was not sustained above $21K. It lost $500 less hours later. The change in Bitcoin price resulted from mixed reactions in the market concerning regulators’ stance on crypto.
Gary Gensler is the SEC’s boss and stated that Bitcoin and other tokens are classified under commodities. Gensler said that an ETF for spot Bitcoin might not work well in the market. Therefore, Gensler stated that a spot Bitcoin ETF will not be approved by the commission.
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When questioned by media firms, the boss of Securities and Exchange Commission made these statements. After being interviewed, many Bitcoin investors began to sell again, leading to a decline in Bitcoin’s price.
Bitcoin holders often grab more coins
Many investors were confused during the crash of markets and subsequent plunge in prices, when they had to decide whether to buy or sell more. According to Glassnode, however, dataSome Bitcoin owners believe that the market crash has been the best time to purchase more BTC. Twitter revealed the information over the weekend by the firm, which showed that more than 100 whale accounts are purchasing more Bitcoin in this period.
These whales are known to grab coins at discounts due to panic on the market. Glassnode also noted that this current trend may not last for long. The amount of BTC stored in multiple wallets shows interest in purchasing more whales.
The addresses with 10BTC-10,000BTC balances have gained more coins within two weeks. Since the beginning of February 2022, wallets with more than 10,000BTC have increased.
Miners Feel the Strain
Miners were also severely affected by the crypto winter 2022. They are trying to make a profit which hasn’t been easy due to the bear market.
In order to relieve pressure many miners have sold their equipment. An analysis by strategists has shown that miners in the public sectors are responsible for 20% of miners’ sales between May & June. It could also be similar for private-sector miners, they suggested.
However, the loans of $4 billion secured by mine equipment are not being paid back. The report states that miners tend to be weaker than others and have fallen foul of the loan agreements.
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This is because the collateral value for the mining rigs has been devalued by the bear market. Because the collateral’s value is no longer equal to the loan amount, it causes the loan to increase.
Charts from TradingView.com, featured image by BBC