Bitcoin Dips Below $60.4K as Seized PlusToken Cryptos Hit Exchanges, Stocks Rise

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.

Bitcoin (BTC) fell below the $61,000 level on Wednesday evening, as crypto markets continued to trade in the red. This contrasted with U.S. stock markets, which climbed to new record highs.

BTC/USD started the day at around $62,000, before slipping lower throughout the later hours of the U.S. trading session to hit a low of $60,400.

From Wednesday’s peak, BTC is now down 2.4% over the past 24 hours, and trading below a key resistance point of $62,500.

Despite the token’s earlier resilience from the downturn, ether (ETH) also fell on Wednesday, dropping by 3.2%.

ETH/USD slipped to a low of $4,100 during the later U.S. session, which is down from Tuesday’s peak of $4,300.

Overall, crypto markets are down by 1.5% in the past 24 hours, with the total market cap now at $6.1 trillion.

One factor that may have weighed on crypto prices on Wednesday was reports of seized cryptos, linked to the PlusToken ponzi scheme, being moved to exchanges throughout the day.

This raised concerns of potential selling pressure coming to the market, as Chinese authorities initially seized nearly $4 billion worth of crypto from the PlusToken operators in November 2020.

Of the seized crypto, which included ether, bitcoin, dogecoin and XRP, one observer noted that some 7,000 ETH, valued at $16 million, was moved to exchanges in the past 24 hours.

This may indicate an intention to sell the remaining assets, as part of the seized crypto was sold by authorities earlier this year, and returned to victims of the ponzi scheme.

In early August, the remnants of ether 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

Microcaps pump on market manipulation charges

At some corners of the crypto markets, microcap tokens soared in value following news that U.S. federal prosecutors charged crypto trading firms Gotbit, ZM Quant, CLS Global and MyTrade, along with their employees, with market manipulation and fraud.

A CoinDesk report in 2019 detailed how Gotbit co-founder Alexey Andryunin built a business out of faking exchange volumes for tiny crypto tokens.

Prosecutors also created a cryptocurrency, as part of the investigation, which was used to highlight the alleged fraud.

According to the court documents, prosecutors created the NexFundAI Token at the direction of law enforcement.

A token with the ticker NEX, and an insignificant market capitalization, surged in value by as much as 3,500% on Wednesday evening.

This appeared to be driven by speculators attempting to identify the token created by prosecutors, and rushing to acquire the potential token in order to profit off the attention.

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

Less dovish Fed

In traditional markets, the S&P 500 closed the day at a new all-time high, while the tech-focused Nasdaq climbed by 0.6%.

The 10-year U.S. Treasury rates also advanced, hitting a two-month high of 4.08% during the session.

Investors were digesting the minutes of the 20-21 September meeting of the Federal Market Open Committee (FOMC).

The document showed that a “substantial majority” of Federal Reserve officials supported the larger cut, but some favored a smaller 25 basis point (bps) increase.

Officials agreed that more rate 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.

Expectations of another 50 bps cut also vanished, dropping to zero from 35% last week.