There could be two completely separate causes of the recent bear market in bitcoin.

A road roller crushes over 1,000 high-performance computers confiscated from so-called crypto farms in Malaysia.

The mining of bitcoin and other cryptocurrencies is not illegal in Malaysia but miners stealing power from the grid is. Malaysia was home to 3.4 percent of the world’s bitcoin farms.

This means a reduction in global computing capacity, the so-called hash rate, and in turn a drop in bitcoin production.

This might be affecting the price, the bitcoin price broke below key support at $30,000 overnight for the first time since the start of the year.

Grayscale

Crypto blogger «Mr. Whale» pointed to another factor in the bearishness around bitcoin: the Grayscale Bitcoin Trust (GBTC) – the world’s largest investment vehicle for bitcoin. Over the last year GBTC has grown to over $21 billion.

Grayscale bought around 650,000 bitcoin but that number has consistently fallen since January.

GBTC investors do not buy bitcoin directly, but shares in the trust. This makes the investment much more liquid and tradable. At times, investors have paid a premium of 40 percent to the bitcoin price for GBTC shares. A relationship that has flipped in recent months and the net asset value of the GBTC is now 15 percent below the bitcoin price.

Share Sale Block Lifted

A special feature of the GBTC is that if an investor buys shares, they remain blocked for six months.

On Sunday, the block on 16,240 bitcoin shares was lifted, in the whole of July 41,000 have been unblocked. It is possible that institutional investors used this unlocking to sell, causing a further price slide, «Mr. Whale» said.

Crypto analysts note dwindling interest in bitcoin by institutional investors since April. Some see the recent stronger inflows into gold ETFs as a reallocation.

At the same time, China had kicked out bitcoin miners, which also affected the hash rate and price. The regulatory environment for cryptocurrencies in the U.S. also remains uncertain. bitcoin is caught in a very strong bear hold.