Broader risk sentiment also cooled as Wall Street snapped an eight-day winning streak, with traders now seeking more positive cues to extend a mid-August rebound rally.
Bitcoin dropped 2% to $59,570 by 09:07 ET (13:07 GMT) after failing to hold above the $60,000 support level.
A wallet associated with Mt Gox was seen mobilizing about $2 billion worth of Bitcoin, potentially preparing for more token distributions.
The defunct exchange began returning tokens stolen during a 2014 hack back to clients in early-July, and had initially triggered steep losses in Bitcoin’s price by sparking fears of increased supply and a mass sale event.
But while Bitcoin did recover most of the initial losses, traders still remained on edge over any more potential distributions by the exchange. It is also unclear just how much Bitcoin Mt Gox holds, although the exchange was seen moving some $9 billion worth of tokens earlier this year.
Bitcoin recovered a bulk of losses marked in early-August as fears of a U.S. recession dwindled.
But the token struggled to break above the $60,000 level consistently, amid few positive signals for crypto markets.
While broader risk sentiment was buoyed by expectations of interest rate cuts and a soft landing for the U.S. economy, Bitcoin mostly lagged a stronger recovery in stocks.
This trend also came amid dwindling capital inflows into crypto investment products. Trading volumes in the products were also at a fraction of highs seen during the launch of spot Bitcoin exchange-traded funds (ETFs) earlier this year, data showed this week.
But despite an underwhelming performance in recent months, institutional investors continue to boost their exposure to ETFs, according to a report from asset manager Bitwise on Monday.
“The biggest question in crypto right now is whether institutions and professional investors will allocate to crypto in a major way,” Bitwise said.
The report highlighted that the total number of institutional investors holding bitcoin ETFs increased by 14% in the second quarter, rising from 965 in the first quarter to 1,100. Moreover, these investors’ share of the total assets under management (AUM) in bitcoin ETFs grew from 18.74% to 21.15%, with institutions ending the quarter holding $11 billion in BTC ETFs.
“This is a great sign,” the note states. “If institutions will buy bitcoin when prices are volatile, imagine what could happen in a bull market.”
Bitwise also addressed the criticism that bitcoin ETFs are primarily held by retail investors, calling this claim “simply untrue.” The firm noted that institutions have adopted these ETFs “at the fastest rate of any ETF in history.” While most ETFs gain momentum gradually, Bitwise predicts that bitcoin ETF inflows will be larger in 2025 than in 2024, and even bigger in 2026.
“The institutions are coming, and they’re coming in size,” the report emphasized.
Broader altcoin prices drifted lower on Wednesday, tracking losses in Bitcoin. World no.2 token Ether fell 2.2% to $2,581.85
SOL and XRP shed between 1.6% and 3%, while MATIC and ADA added 7% and 2.2%, respectively.
Among meme tokens, DOGE slipped 0.5%.
Markets are focused squarely on more cues on U.S. interest rate cuts this week, with the minutes of the Federal Reserve’s late-July meeting due later on Wednesday. The Fed had struck a dovish chord during the meeting.
Fed Chair Jerome Powell is set to speak at the Jackson Hole Symposium on Friday, and is set to potentially offer up more cues on interest rates, amid growing expectations that the central bank will cut rates in September.
Ambar Warrick contributed to this report.
Source: Cryptocurrency - investing.com
