Early Thursday saw Bitcoin’s price dip below $58,000 for the first time in two months, triggering a broader decline across major cryptocurrencies.
This drop is primarily attributed to the anticipated release of a significant amount of Bitcoin by the defunct Mt. Gox exchange to its creditors.
Bitcoin, which had been consistently trading above $60,000, fell by over 5% in the past 24 hours.
Ether, another leading cryptocurrency, also experienced a decline, falling more than 5.4% to below $3,200.
Other major tokens like Binance’s BNB, Solana, and Dogecoin saw drops of 6.1%, 8.8%, and 7.2% respectively.
The market’s unease stems from the imminent distribution of approximately 140,000 Bitcoins (valued at around $8 billion) to Mt. Gox’s creditors.
The fear is that creditors might sell off some of their reclaimed assets, leading to a further decline in cryptocurrency prices.
This payout will occur in stages, adding to the market’s volatility.
Mt. Gox, once a major Bitcoin exchange, collapsed in 2014 following a massive security breach.
Additionally, analysts from Bloomberg have suggested that political uncertainties in the United States, particularly around the upcoming presidential election, may also be influencing the crypto market.
Concerns are growing about President Joe Biden’s performance in the race, with speculation that a stronger Democratic candidate might replace him to challenge former President Donald Trump, who has positioned himself as a pro-crypto leader.
In the past month, Bitcoin’s value has plummeted by 18.3%, a stark contrast to its peak of over $73,700 in March, which was driven by the launch of spot Bitcoin exchange-traded funds.