Bitcoin Briefly Slips Below $60K, SEC Drops Ethereum Probe

Key Takeaways

The bitcoin price has continued its month of suffering, as the price briefly dipped below $60,000 on Monday.Former bitcoin exchange Mt. Gox has announced distribution of funds owed to former customers will begin in early July.The Securities and Exchange Commission (SEC) closed its investigation into Ethereum without filing charges against blockchain technology firm Consensys.Crypto asset manager Hashdex has filed for a combined spot bitcoin-ether ETF.This week, analysts will be watching to see if bitcoin can halt its decline while also keeping an eye on Thursday’s U.S. presidential debate.

June hasn’t been kind to bitcoin: The price of the cryptocurrency briefly slipped below the $60,000 level Monday after it looked like it could surpass the previous all-time high of more than $73,000 earlier in the month.

The most recent negative news for bitcoin comes in the form of a coming distribution of bitcoin owed to former customers of defunct bitcoin exchange Mt. Gox, which is estimated to involve as many as 140,000 bitcoin coming onto the market.

That said, the past week hasn’t been all bad news for crypto, as the U.S. Securities and Exchange Commission (SEC) concluded its investigation into Ethereum and blockchain technology firm Consensys without filing any charges. In addition, crypto asset manager Hashdex has filed for a spot crypto exchange-traded fund (ETF) that will focus on diversification.

Mt. Gox Repayment Plan Causes Bitcoin Jitters

The defunct bitcoin exchange Mt. Gox announced it will begin the long-awaited process of returning assets to its customers in July, over a decade after it filed for bankruptcy following multiple hacking incidents. The total amount of bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 bitcoin, potentially valued at up to $9 billion.

While some investors worry that the influx of these bitcoins could depress prices, others argue that the potential selling pressure may be overstated, noting that creditors have had years to sell their claims if they needed funds urgently. The announcement of the impending Mt. Gox repayments caused bitcoin’s price to briefly dip below $60,000 Monday, continuing its downward trend for the month.

According to data from Farside Investors, spot bitcoin ETFs have now suffered their largest outflows over a two-week period since U.S. spot bitcoin ETFs were approved in January, with investors pulling out a net $1.1 billion from these funds over that timespan.

SEC Closes Ethereum 2.0 Investigation

On June 18, blockchain technology company Consensys announced that the SEC’s enforcement division has concluded its investigation into Ethereum 2.0. Despite the closure, the SEC’s stance on whether ether, the native token of the Ethereum blockchain, qualifies as a security remains ambiguous.

According to Consensys, the regulator began its investigation into Ethereum last year and the company sued the SEC early this year, claiming that Ether was a commodity and that the SEC lacked jurisdiction to investigate.

While the SEC’s chair, Gary Gensler, hasn’t definitively labeled ether a security, the Commodity Futures Trading Commission (CFTC) considers it a commodity. The investigation’s closure could indicate the SEC leans toward treating ether as a commodity, although the SEC’s future actions remain uncertain.

According to Fortune, Consensys’s legal battle with the SEC will continue despite the recent announcement. The conflict originally stems from the SEC’s scrutiny of Consensys-owned crypto wallet MetaMask, particularly its token-swapping capabilities and staking access. The SEC contends that these functions constitute unlicensed brokerage activities involving unregistered crypto asset securities. Consensys indicated that while the closure of the Ethereum 2.0 investigation is a win, it doesn’t fully address the broader regulatory issues.

Hashdex Files for Combined Bitcoin-Ether ETF

With spot bitcoin ETFs already trading in the U.S. and spot ether ETFs seemingly right around the corner, the next development could be a combined ETF featuring both leading cryptocurrencies. Hashdex, a crypto asset manager, is spearheading this effort with a recent filing for the Hashdex Nasdaq Crypto Index US ETF.

If approved, this ETF would be the first in the U.S. to directly hold both bitcoin and ether. According to Nasdaq’s filing with the SEC, the ETF will track the Nasdaq Crypto Index (NCI), which is weighted by market capitalization. Coinbase Custody and BitGo are set to serve as custodians. The ETF aims to provide a passive investment strategy, offering investors exposure to the market’s overall performance. Hashdex already has a similar product in Brazil.

While the new ETF initially will focus on bitcoin and ether, the filing leaves room for the inclusion of additional crypto assets in the future, provided they meet regulatory criteria. Bloomberg analyst James Seyffart noted that the final decision from the SEC on Hashdex’s application is expected by early March 2025.

What To Expect in the Markets This Week

Crypto market analysts will be watching the bitcoin price closely this week, hoping for signs that the bleeding will stop, especially in the context of high bitcoin ETF outflows and the upcoming Mt. Gox distributions.

However, some market watchers, such as Custodia Bank founder and CEO Caitlin Long, say the bitcoin price decline isn’t something to worry about in the context of the recent halving event. “It’s normal for a price dip like this to happen after a halving—halvings are incredibly bullish, but bull markets don’t start until typically several months later—for fundamental reasons,” Long posted on X.

All eyes will also now turn on Thursday’s U.S. presidential debate between Joe Biden and Donald Trump, as conversations about cryptocurrencies find momentum on the campaign trail.

Former President Trump has changed his stance about bitcoin, now seemingly supporting the cryptocurrency without making any definitive regulatory or policy-related comments for digital assets. Due to the SEC’s aggressive enforcement actions during his administration, President Biden, by extension, has not been viewed as crypto-friendly—an image that his campaign is trying to dissociate from him, although there are no specifics on crypto policy from that camp, either.