Synchronized with NVIDIA, Bitcoin falls below $60,000, "90 billion dollars" gloom looms

Since last week's "Triple Witching Day" adjustment, Nvidia has continued to plummet, dragging down the Nasdaq. Concurrently, the cryptocurrency market has also experienced a significant correction.

As of the Monday close, the price of Bitcoin fell to $59,191.39, hitting a new low since early May. Bitcoin has dropped by 12% so far this month.

Nevertheless, compared to the price below $43,000 at the end of last year, Bitcoin still maintains a relatively high level in 2024.

Multiple factors contribute to the current market trend. Ilan Solot, Senior Global Market Strategist at London financial firm Marex Solutions, pointed out that news of the German authorities selling Bitcoin confiscated from criminal activities and the bankrupt exchange Mt. Gox preparing to repay Bitcoin to creditors could increase market supply pressure.

The latest developments in the Mt. Gox bankruptcy case are particularly noteworthy. The exchange suffered multiple hacker attacks from 2011 to 2014, resulting in the loss of a large amount of Bitcoin and eventual closure in 2014.

After nearly a decade of waiting, Mt. Gox will begin returning Bitcoin to customers in July 2024. Although the specific quantity is not yet determined, it is estimated to be between 65,000 and 140,000 Bitcoins. At current prices, this could amount to nearly $9 billion at the highest.

This impending large-scale supply entering the market has raised concerns among investors about price declines. Some media outlets have pointed out that the additional Bitcoin supply is equivalent to more than half of the ETF inflows.

Since the launch of Bitcoin spot ETF trading on January 11, net inflows have exceeded $14.5 billion, considered one of the main factors driving the significant increase in Bitcoin prices.

However, Alistair Milne, Chief Investment Officer of Altana Digital Currency Fund, believes that the selling pressure on Bitcoin caused by the Mt. Gox incident may be overestimated. He emphasized on X that creditors of Mt. Gox who urgently need funds had ten years to sell their claims, and those who still hold onto these claims are unlikely to rush to sell Bitcoin.

Analysts point out that in addition to the risk of increased supply, the deeper reasons for the Bitcoin correction may lie in investors reassessing the attractiveness of cryptocurrencies relative to other investment options. Ilan Solot believes that in the current cycle, cryptocurrencies may not offer a sufficiently good risk-return ratio compared to tech stocks.