Bitcoin Dips Below $61K, Ether Slips 3% as Some PlusToken China Ponzi-Related Coins Moved to Exchanges

Cryptocurrencies continued to show weakness on Wednesday with bitcoin {{BTC}} dipping below $61,000, in stark contrast with U.S. stocks, which climbed to new records.

BTC started the day around $62,000, then slipped ever lower during the later hours of the U.S. trading session to $60,400, down 2.4% over the past 24 hours. Ether {{ETH}} held up slightly better for most part of the day, then dived 3.2%.

What likely weighed on prices was reports circulating about seized cryptos linked to the PlusToken ponzi scheme being moved to exchanges during the day, raising concerns of potential selling pressure coming to the market.

Chinese authorities seized nearly $4 billion worth of crypto, including ETH, BTC dogecoin {{DOGE}}, xrp {{XRP}} from the PlusToken operators in November 2020.

One observer noted that some 7,000 ETH, worth $16 million, of the remaining $1.3 billion ETH was moved to exchanges in the past 24 hours, which may indicate an intention to sell the assets.

In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.

Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L

— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024

Microcaps pump on market manipulation charges

Strange action happened at some unexpected corners of the crypto market.

Earlier today, U.S. federal prosecutors charged crypto trading firms Gotbit, ZM Quant, CLS Global and MyTrade and their employees with market manipulation and fraud. Notably, a CoinDesk report in 2019 detailed how Alexey Andryunin, the co-founder of Gotbit and one of the individuals charged by prosecutors, built a business out of faking exchange volumes for tiny crypto tokens using trading bots to get listed on price aggregators like CoinMarketCap.

Robo inu (RBIF), one of the tokens mentioned in the documents, more than doubled in price for a brief minute on the news, and was still up 20% during the day, per CoinGecko data.

Prosecutors created a cryptocurrency called NexFundAI Token at the direction of law enforcement for the investigation, a court document showed. A token with the ticker NEX with insignificant market value surged as much as 3,500% as speculators rushed to chase the potential token to profit off the attention.

Then, its price quickly tumbled as the document also said that prosecutors had already disabled trading with the token before unsealing the charges.

Less dovish Fed

A check on traditional markets showed the S&P 500 closing the day at a new all-time high, with the tech-focused Nasdaq climbing 0.6%. The 10-year U.S. Treasury rates advanced to a two-month high of 4.08% during the day, as investors digested the minutes of the September meeting of the Federal Market Open Committee.

The document showed that a "substantial majority" of Federal Reserve officials supported the larger cut, but some favored a 25 bps. Policymakers agreed that more cuts are likely coming but appeared split about the pace and size of future cuts.

Traders now see a 21% probability that the Fed will keep rates steady at the next meeting in November, up from zero only a week ago, while expectations of another 50 bps cut vanished, down from 35% last week.