The past month has been a tough one for Bitcoin and the crypto market at large by association. Between the now-bankrupt Mt Gox crypto exchange finally making payments to creditors in Bitcoin and Bitcoin Cash, after 10 years of winding up, and the massive sell-offs from the German government after seizing 50,000 bitcoins worth around $3 billion from the pirate site Movie2k, the crypto landscape has been significantly turbulent in the last month.
That wild ride has seen its price plummet from an all-time high that exceeded $73,000 to settling at $58,724.60 by July 10. Having seen more than 20% of its value being erased in that period, the last week may have been tough but the last three days finally saw a small upward trend begin to gather some momentum. However, as the German government still has approximately $1.9 billion in Bitcoin to sell, it’s not all smooth sailing yet.
The Bigger Picture
The crypto market at large has been hit hard by Bitcoin’s slump, with fears still pervading that fresh rounds of panic selling may be ahead. The implications of this may be far-reaching, not just for the crypto industry directly but those it supports too. Among them, one sector showing particular resilience and growth is crypto gambling. With many general crypto and Bitcoin casinos gaining major traction in recent years, the iGaming industry’s widespread early adoption of cryptocurrency as a payment method seems to have insulated it somewhat from all the current drama.
One of the standout types of platforms during this digital gambling resurgence is those that can be played online with Plinko game. A type of game made famous by the American TV show “The Price Is Right”, according to gambling writer Michael Graw, Plinko sites offer different versions of the game—even those that can be played with cryptocurrency. Amidst the Bitcoin market’s slight recovery phase that’s seen it gain around 4% in the last three days, this upward traction provides some relief for investors and industries where it’s widely used. However, it remains a precarious situation overall.
Impact of Mt Gox Payments and Government Sell-Offs on Bitcoin’s Price
With the Mt Gox bankruptcy case finally heading toward a final resolution, the defunct exchange has provided guidelines for creditors. In cases where sufficient proof and verified payment addresses can be confirmed, the company stated that authorized payments will be made to both customers and creditors promptly. The situation is fluid though so it’s uncertain exactly how things will play out once the claims start coming through and piling up.
With approximately 140,000 bitcoins to distribute, it spells some good sentiment as this will reintroduce a lot of value into the market. However, large inflows can tend to temporarily depress markets as the supply is absorbed back into the market, so it’s difficult to say how things will play out both short and long-term.
At the same time, the German government’s liquidation of a large portion of the bitcoins seized from the Movie2k case will likely add even more pressure to the already severely strained market. Even though these sales are being handled as discreetly as possible to avoid mass disruption of markets, the sale volumes will be noticed if they are too high, with the potential to trigger panic selling among ordinary or more uninformed Bitcoin holders who may view them as a sign that the market is in freefall.
With around $1.9 billion in sales still to be made, how the matter is handled could potentially have huge ramifications for Bitcoin’s price and the crypto market in general. Between the Mt Gox situation and the Movie2k case, analysts will keep a close eye on how they both develop. In an extreme case, more price tumbles could be ahead and this could either trigger mass selling, potentially causing a ripple effect that sparks a bear market ahead, or be seen as a good moment for new investors to buy in, helping the market to grow long-term.
Technological and Regulatory Developments Supporting Bitcoin’s Stability
As one of the most dynamic sectors in the tech world today, blockchain technology is also changing all the time. As constant searches for advancements with issues like scalability, improving the environmental impact, and increasing the rate of transactions, technological advancements are growing the crypto industry as a whole all the time. As the world’s foremost and most valuable cryptocurrency by market capitalization, any large-scale shifts in Bitcoin can be very detrimental to the market at large.
However, continuous innovation and improvements in blockchain efficiency and security can continue to attract investment into Bitcoin, helping to stem the tide of its price fluctuations and decreasing volatility over time. A great example of this is the Lightning Network which has enhanced transaction speeds and reduced costs greatly. This has helped make Bitcoin more practical for small, everyday transactions, which has helped grow its prominence and use in industries like real money online casinos and eCommerce.
On the regulatory front, the upcoming US election is poised to have a major effect on the crypto industry as a whole, and Bitcoin in particular as its largest player. While Donald Trump has now changed his position on cryptocurrencies and fully supports them, Joe Biden and the Democratic Party have fallen on the side of calling for stringent regulation of the industry. On the other hand, if Biden is recalled before the election, the position could change again as his replacement may have their own views either for or against cryptocurrencies.
Either way, while the market itself has significantly matured, and under ordinary circumstances, would probably be experiencing more growth, or at least greater stability right now, the variety of geopolitical and economic factors influencing it right now means it’s harder to predict how everything will play out. However, there’s also plenty of evidence to suggest that despite its biggest detractors over the years, both Bitcoin and cryptocurrencies, in general, are here to stay. Whether societies and governments will be able to create the kinds of environments that allow them to thrive and improve the world or become an asset that only a certain class of people can benefit from is another question altogether.
