Bitcoin Hits 5-Month Low, Mt. Gox Begins Repayments, Circle Secures MiCA License | Weekly Recap

Bitcoin Hits 5-Month Low, Mt. Gox Begins Repayments, Circle Secures MiCA License | Weekly Recap

In this week’s edition of our recap, we observe significant developments in the cryptocurrency landscape. Bitcoin (BTC) has dropped to a five-month low amid a series of whale selloffs, Mt. Gox has commenced creditor repayments, and Circle has secured the first stablecoin license under MiCA as regulatory efforts intensify.

Market Downtrend

Despite a promising start to July based on historical performance, Bitcoin’s bullish run was short-lived. After reaching a one-week high of $63,861 on July 1, BTC failed to sustain this momentum, falling below $63,000. Analysts at Bitfinex noted Bitcoin’s divergence from the bullish U.S. equities market. Glassnode highlighted Bitcoin’s indecisive phase amid bearish pressures, leading to three consecutive intraday declines and dropping below $59,000 on July 4, hinting at miner capitulation.

Bitcoin Hits 5-Month Low

Core Scientific founder Darin Feinstein remained bullish on BTC despite its downtrend, suggesting it was undervalued. However, Bitcoin continued to record lower lows, dropping below $57,000 on July 4. A combination of miner capitulation, whale exchange deposits, selloffs from the German government, and Mt. Gox repayments exerted further bearish pressure. This resulted in a five-month low of $53,485 on July 5. The broader market suffered as well, with significant losses in the altcoin market and considerable declines in Bitcoin mining stocks.

Meme Coins Rally

Amid Bitcoin’s struggles, meme coins showed robust recoveries. On July 6, Bitcoin reclaimed $58,000, but its strength soon waned, and it fell below $58,000 again. Meanwhile, meme coins like BONK, dogwifhat (WIF), PEPE, and BRETT recorded gains exceeding 15% over 24 hours on July 6. Despite the market downturn, there was relatively low crypto funding activity last week, partly due to the July Fourth holiday in the U.S. However, Sentient, an AI research organization, raised an impressive $85 million in seed funding.

German Government’s Distribution Campaign

The market crash was compounded by the German government’s ongoing distribution of the 50,000 BTC seized from the defunct piracy platform Movie2k. Since July 1, the government has been distributing Bitcoin daily, sending out 7,070 BTC tokens last week. This added to the market pressure, with the government still holding 39,826 BTC as of the last update. Tron founder Justin Sun offered to purchase the German government’s BTC off the market to mitigate the selling impact. German legislator Joana Cotar also urged the government to halt the BTC sales. Concurrently, the U.S. government distributed 274 Bitcoins from its holdings last week.

Mt. Gox Begins Repayments

The Mt. Gox repayments further contributed to the selling pressure. The defunct exchange announced plans to begin repayments this month and conducted test transactions on July 4. On July 5, Mt. Gox transferred 47,228 BTC to a new address in preparation for the repayment. Creditors confirmed that repayments began on July 4, with reimbursements made in BTC and Bitcoin Cash (BCH).

Circle Secures Stablecoin License Under MiCA

Circle achieved a significant milestone by obtaining a license to provide stablecoin services for USDC under the new MiCA legislation across the European Union, making it the first stablecoin issuer to do so. Additionally, the central bank of Russia might consider legalizing stablecoins for trade with China.

Other Regulatory Developments

The European Banking Authority (EBA) expanded its guidelines around Travel Rules to include firms providing crypto services, aiming to strengthen AML procedures. In the U.S., a judge approved a motion from Ethereum development firm Consensys to expedite its legal case against the SEC. Mike Novogratz, founder and CEO of Galaxy Digital, expressed confidence that the U.S. crypto industry would achieve the needed regulatory clarity regardless of the outcome of the forthcoming presidential election.

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