What’s Causing the Crypto Market Drop?
The cryptocurrency market recently saw a significant drop in overall capitalization due to a sharp decline in prices over the weekend.
Yesterday, Bitcoin fell below $58,000, while Ethereum dropped to a low of $2,860. This downward trend also affected other cryptocurrencies, leading to widespread losses.
This market turbulence is often a result of high volatility inherent to the crypto space, where prices can fluctuate drastically in response to various factors. The recent downturn is linked to repayment actions by Genesis Global Capital, a bankrupt crypto lender.
BREAKING: GENESIS MOVING $1.5B BTC + ETH FOR CREDITOR REPAYMENTS
Wallets linked with Genesis Trading have moved 16.6K BTC ($1.1B) and 166.3K ETH ($521.1M) in the past hour – likely for in-kind repayments to creditors.
BTC: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmux
ETH:… pic.twitter.com/5Jtxqx8mxT— Arkham (@ArkhamIntel) August 2, 2024
Genesis has completed its restructuring and is now distributing around $4 billion to its creditors, including both cryptocurrencies and fiat. Bitcoin creditors will receive 51.28% of their claims, Ethereum creditors will get 65.87%, and Solana creditors will receive 29.58%.
READ MORE: Bitwise CIO Predicts Major Institutional Investment in Crypto ETFs This Year
On Friday, Genesis moved over $1.5 billion in assets, including 16,600 BTC (approximately $1.1 billion) and 166,300 ETH (about $521 million). This transaction, which included a notable $19.9 million worth of Ethereum going to billionaire Mark Cuban, led to a surge in market volatility.
The influx of funds being liquidated by creditors contributed to the price drop, as many investors sold off their assets following long waits for repayment. The total cryptocurrency market cap fell by over 3.4% in the past 24 hours, reducing it to $2.08 trillion. Bitcoin and Ethereum prices fell accordingly.
Genesis Global Capital is not alone in this process; Mt. Gox, another bankrupt crypto entity, has also been repaying its creditors recently. The market is likely to continue reacting to these large-scale fund movements as more repayments occur.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
