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Bitcoin Recovery Stalls As Mt. Gox Fears Rattle Crypto Market

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6 months ago

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Bitcoin Recovery Stalls As Mt. Gox Fears Rattle Crypto Market

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Bitcoin prices fell to a four month low on Monday, resuming a weeks-long downturn in the cryptocurrency that has seen prices for other major tokens tumble amid uncertainty over looming selloffs from the German government and creditors of bankrupt crypto exchange Mt. Gox.

Key Facts

Bitcoin prices fell more than 6% early Monday morning before trimming losses to trade at around $55,500 as of 3:15 a.m. EST, still 4% down from the same time the day before.

It is the lowest price for the world’s leading digital asset in months and down around $18,000 from an all time high of just under $74,000 in March, a loss of about one fifth.

Ether, the world’s second largest cryptocurrency by market capitalization after Bitcoin, followed a similar trajectory, sliding by more than 7% before recovering to trade at around $2,900 at 3:15 a.m., down 4% on the day.

The path was also mirrored by Binance’s BNB, Solana, XRP Ripple, Dogecoin and Cardano’s Ada — the next biggest cryptocurrencies, excluding stablecoins pegged to traditional currencies like Tether and USDC — with falls of between 9% and 11% paring to losses of between 2.5% and 7% at 3:15 a.m.

Overall, the total cryptocurrency market had shed around $20 billion in value over the course of a day at 3 a.m. EST, a drop of around 2% from the day before.

Why Is Bitcoin Down And The Crypto Market Crashing?

The Bitcoin selloff on Monday threatens to continue a dismal, weeks-long streak of decline for the popular cryptocurrency as it slides from record highs in March. The fall comes amid diminishing interest in cryptocurrency exchange-traded funds (ETFs), uncertainty over monetary policy and fears that bankrupt Tokyo crypto exchange Mt. Gox could spark a crash as it follows through on its promise to repay creditors. The exchange was once one of the biggest crypto platforms in the world but filed for bankruptcy a decade ago after hackers stole most of its crypto assets between 2011 and 2014. Bitcoin is trading around 10 times higher Monday than the time the exchange declared bankruptcy and today the bitcoin haul would be worth north of around $58 billion, according to CNBC. The exchange managed to recover some funds after declaring bankruptcy, tokens worth around $9 billion today, and markets have responded to what is expected to be a massive Bitcoin selloff as creditors cash out at a much higher price than when they lost the crypto tokens. Bitcoin makes up over half the total value of the cryptocurrency market and its fortunes tend to be mirrored by the market as a whole and smaller crypto tokens.

Tangent

Mt. Gox is not the only factor behind the falling crypto market and the German government is also making waves by hastily selling off hundreds of millions of dollars worth of Bitcoin for fiat currency. Berlin has been sending its cryptocurrency reserves to exchanges like Coinbase, Bitstamp and Kraken since June as the European government offloads and liquidates assets it has seized from various criminal groups. The transfers have added to concerns about significant selloffs in the market and, according to Arkham Intelligence, Germany reportedly still holds around $2.2 billion worth of Bitcoin.

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