Bitcoin faces renewed pressure amidst concerns over potential sales by creditors of the failed Mt. Gox exchange, who are in the process of returning approximately $8 billion worth of the largest digital asset.
The original cryptocurrency dipped approximately 5%, trading at $54,400 as of 9:25 a.m. Monday in Singapore, marking a $19,000 drop from its peak in March. Other cryptocurrencies like Ether, XRP, and Dogecoin, popular among meme enthusiasts, also saw declines.
Market sentiment has been further dampened by reports of the German government liquidating seized Bitcoin holdings, coinciding with cautious investor behavior following weekend elections in France.
Once the world’s largest Bitcoin exchange, Mt. Gox, headquartered in Tokyo, was hacked in 2011 and declared bankruptcy in 2014. The imminent return of tokens to creditors has raised concerns about a potential surge in supply hitting the market.
“The key question for digital assets is when the ‘overhang’ of Mt. Gox and German-related sales will dissipate,” noted Chris Weston, head of research at Pepperstone Group, in a statement.
Bitcoin had soared to record highs in the first quarter of the year, driven by the launch of the first U.S. exchange-traded funds for the digital asset. However, investor interest has since moderated, and Bitcoin’s year-to-date performance lead over traditional assets such as stocks is shrinking rapidly.
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