Bitcoin Tumbles Back Under $58K as Crypto Quickly Crumbles Thursday Afternoon

Several days of mostly quiet price action came to a fast end during U.S. trading hours Thursday afternoon, with cryptocurrencies suddenly plunging and sending bitcoin (BTC) to its weakest level since just after the early August market panic.

At press time, bitcoin was changing hands at $57,700, down nearly 3% from its price just about an hour earlier. Other majors saw even steeper declines, including ether (ETH) and solana (SOL). The broad market gauge CoinDesk 20 Index was lower by 3% from 24 hours ago.

Summer 2024 has been notable for two previous panicky declines, the first of which occurred as the U.S. was enjoying its July 4 break. The catalyst for that selloff was a German government entity moving to begin selling the first of its 50,000 bitcoins which had been seized as part of a criminal probe. The second major tumble was just about two weeks ago, when what seemed like a benign rate hike by the Bank of Japan triggered a global plunge in equity markets that spread to all risk assets, crypto included.

Today's selloff, for now, appears to have no obvious catalyst. U.S. equity markets are again soaring, with the Nasdaq ahead 2.4% and the S&P 500 1.6% – both of those indices now having returned to levels seen well before the early August panic.

Ignoring good news

Bulls could be forgiven for their frustration with the recent action as the positive catalysts continue to roll in, but prices aren't responding. Catalyst number one would be the above-mentioned rally in the stock market.

The stock market rally, in part, can be attributed to what's now nearly certain to be a U.S. Federal Reserve easing cycle. Short-term interest rate markets for more than two weeks have priced in a 100% chance that the first Fed rate cut will be coming in September. While past monetary easing campaigns have proven to a boon for crypto, prices have failed to respond so far in this cycle.

Another seemingly positive catalyst would be what's become speedier institutional adoption of bitcoin. The latest batch of 13F filings (which covers the quarter ended June 30) showed 1,924 institutional holders of the spot bitcoin ETFs, according to ETF Store President Nate Geraci. That's up from 1,479 in the first quarter even as prices fell during the April to June period, noted Geraci.

And the list of publicly traded companies willing to tap capital markets to boost bitcoin holdings continues to expand. Marathon Digital (MARA) – already in the business as a bitcoin miner – this week raised $300 million in convertible debt and immediately took the funds to smash buy more than 4,000 bitcoins for about $59,000 each. Medical equipment maker Semler Scientific (SMLR) – which months ago announced its bitcoin treasury intentions – this week received approval from the SEC to move ahead with more than a $150 million capital raise, the proceeds of which will be used to buy additional tokens.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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