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This Week in Coins: Bitcoin’s Bad Week Sinks Crypto Fleet
Illustration by Mitchell Preffer for Decrypt.
After Ten Years, Bitcoin Distributions from Mt. Gox Bankruptcy officially started—and the cryptocurrency market is scared.
On Friday, the price of Bitcoin collapsed as low as $53,898, its lowest price since February, according to CoinGecko. That’s a 27% drop from its all-time high of $73,700 recorded in March, and the largest pullback from a local high since the asset bottomed at $15,500 in November 2022.
While Bitcoin’s price fell rapidly after the exchange revealed it was starting distributions, on-chain data suggests the pullback was driven much more by the narrative than the event itself.
“Mt. Gox wallets continue to hold a total of 138,985 BTC ($7.52B),” blockchain data platform Arkham Intelligence tweeted on Friday. This means that only 2,701 BTC actually left the exchange’s wallets for refunds — and only a fraction of those coins may have been sold by recipients.
Indeed, when announcing that refunds had begun, Mt. Gox administrator Nobuaki Kobayashi asked for patience as they worked to validate and process all of them, writing, “We ask eligible rehabilitation creditors to please wait a little.”
The bearish narrative surrounding Mt. Gox, however, has proven so overwhelming that even altcoins completely unrelated to the exchange are collapsing.
While BTC recovered slightly to $56,372 — a 7% drop in seven days — Ethereum fell sharply and closed the week at $2,989, down 12% weekly. This is despite a counter-bullish narrative for the asset surrounding Ethereum spot ETFs. which may air next weekstating that Mt. Gox and Germany’s Bitcoin are the main concerns in cryptocurrencies at the moment.
The top 10 cryptocurrencies by market cap, excluding stablecoins, ended the week in the red.
So what’s holding it up? Solana is reportedly down just 4% this week — and is actually up a modest 3% over the past 24 hours. The asset is potentially next in line to get the digital asset ETF treatment, with industry observers suggesting this could happen after the U.S. federal election, when crypto’s arch-nemesis Gary Gensler may lose your position at the SEC.
Speaking of the election, Solana-based political meme coins have been on a rollercoaster ride this week amid speculation about President Joe Biden potentially replacing him as the Democratic Party’s nominee.
O Jeo Boden (BODEN) meme coin fell 43% on the week, partially recovering after Biden promised not to drop out of the race. Regardless, Kamala Horris (KAMA) — the coin based on his vice president — is still up 326% as crypto bettors favored briefly Kamala Harris to replace Joe Biden. The president became his vice president yesterday.
The enduring appeal of meme coins has also, unfortunately, been leveraged by scammers. Earlier this week, the $SMASH token — a meme coin inspired by the UFC star Khamzat Chimaev— dropped to zero immediately after the fighter promoted it on social media, with chain evidence pointing to an orchestrated pump and dump.
Edited by Ryan Ozawa.