Bitcoin Slumps Below $63K, Altcoins Rekt, as Crypto Succumbs to Risk Off Mood

Bitcoin's {{BTC}} attempt at even a modest early rally during U.S. trading hours Friday was quickly snuffed out, the price dropping 4% in about the past ninety minutes alongside a major slump in equity markets.

A weak July U.S. jobs report earlier Friday sent bond yields and the dollar plunging – the sort of action that often sends risk assets like stocks and bitcoin into the green, but it's not the case today. Just ahead of the noon hour in the U.S., the Nasdaq is down 3.1% and S&P 500 2.7%, led by an 11% post-earnings decline in Amazon (AMZN) and a 5% drop in Nvidia (NVDA). The Volatility Index (VIX) is up a whopping 54% today.

Bitcoin managed a small gain to above $65,000 at one point but has succumbed to the risk-off mood, tumbling back to $62,900 at press time, down nearly 2% over the past 24 hours. The broader CoinDesk 20 Index is suffering even more, off just shy of 3%. Among those leading the way lower are ether {{ETH}}, solana {{SOL}}, uniswap {{UNI}} and chainlink {{LINK}}, each sporting declines of 4%-5%.

Setting the dour mood even before the U.S. jobs report was a continuing plunge in Japan, where the Nikkei fell 5.8% on Friday following a 4%+ decline a day earlier. The selloff appears to be in response to the most minor of monetary tightening actions on Wednesday by the Bank of Japan, which lifted its benchmark lending rate to 0.25% from a previous range of 0%-0.1%.

Genesis Trading bankruptcy rears its head again

Adding to the bearish action was the movement of 16,600 bitcoin (roughly $1.1 billion) and 166,300 ether (roughly $521 million) from wallets linked with bankrupt Genesis Trading. This action, according to Arkham Intelligence, is likely for in-kind repayments to creditors.

Indeed, at least one creditor took to X to announce that he had received a modest distribution from the bankrupt Genesis estate.

This morning, after almost two years, I received a small distribution from the bankrupt estate of Genesis Capital.

I'm going to hang a photo of it on my wall, as a permanent reminder to minimize and monitor counterparty risk.

— Robert Leshner (@rleshner) August 2, 2024

Having already suffered the sale of 50,000 bitcoin by the German government in early July, the beginning of distributions from bankrupt exchange Mt. Gox, and looming sales from the U.S. government's BTC stash, the Genesis action can now be added to the growing list of supply shocks for the crypto market.