Bitcoin has fallen below $65,000, even with the influx from exchange-traded funds (ETFs)
:Here's what's happening
Bitcoin fell below the $65,000 resistance level this morning, reversing some of the gains it made last week.
: What happened
What occurred was that the BIP-110 upgrade attempt came to a halt when the associated blockchain only managed to generate two blocks over an eight-hour period. Meanwhile, investors turned to equity markets in response to a surprisingly weak US jobs report on Friday, which also impacted the cryptocurrency sector. Despite this, Bitcoin ETFs experienced their highest weekly inflows since April.
Bitcoin falls below $64,000
: Why it matters
BIP-110, or Bitcoin Improvement Proposal 110, was intended to introduce a soft fork for Bitcoin to temporarily limit the embedding of arbitrary data. However, the offshoot chain did not succeed in gaining support from miners.
Interest waned towards the end of last week after data revealed a surprising decline in US nonfarm payrolls (NFP), which dropped by 23,000 in July—the first monthly downturn since February. Bitcoin ETF trading fell by 9% to $8.19 billion during the week, marking the second-lowest weekly total since October 2024.
Meanwhile, US spot Bitcoin and Ether ETFs attracted a combined $1.1 billion in inflows last week, their best showing since April.
Bitcoin saw a slight decrease of about 0.1%, reaching $64,845 this morning, following an approximate 0.2% dip in the previous session. Ether remained relatively stable at $1,916.05.
Bitcoin experiences a decline
In the hours leading up to the decline, Bitcoin seemed ready to mirror the price movements that had propelled it past the $65,000 mark on August 7. According to the daily chart, the cryptocurrency reached an intraday peak of $65,416 shortly after 6:00 PM ET on Sunday. Although experiencing a minor retracement, it successfully maintained the $65,000 level into the early hours of August 10.
The price of Bitcoin
Before the recent transaction, Strategy disclosed that it sold 1,638 Bitcoin from July 27 to August 2, generating roughly $104.7 million. Reflecting on this sale, Strategy's CEO, Phong Le, remarked
"Our reserves in US dollars and their duration have now hit unprecedented levels. In a span of just two and a half months, we've increased by about $3.8 billion, with both figures expanding more than fivefold. This exemplifies the digital credit capital framework at work."
Since May 25, the year-to-date return on Bitcoin has plunged by 87%, and this quarter alone shows a negative return of 6.4%. If the trend continues, returns might turn negative by next week. Schiff questioned how much Bitcoin per share one would be willing to sacrifice to sustain the MSTR scheme. He further wondered why any Bitcoin investor would consider owning MSTR common stock in a post on X, addressing Saylor.
What to watch
Investors will keep an eye on how the BIP-110 dispute is resolved and whether spot ETF inflows can be sustained.