News
Bitcoin Stumbles as Mt. Gox, German Government Fuel Doubts
Top line
Bitcoin prices fell to a four-month low on Monday, resuming a weeks-long slide in the cryptocurrency that has seen prices of other major tokens plummet amid uncertainty over impending sell-offs by the German government and creditors of failed cryptocurrency exchange Mt. Gox.
Bitcoin prices dropped again on Monday.
AFP via Getty Images
Main aspects
Bitcoin prices fell more than 6% in the early hours of Monday morning, before paring losses to settle around $55,500 as of 3:15 a.m. EST, which is 4% lower than the same time the day before.
It’s the lowest price for the world’s leading digital asset in months, down about $18,000 from an all-time high of just under $74,000 in March, or about a fifth of its loss.
Ether, the world’s second-largest cryptocurrency by market capitalization after Bitcoin, followed a similar pattern, falling more than 7% before recovering to settle around $2,900 as of 3:15 a.m., down 4% from the previous day.
Binance’s BNB, Solana, Ripple’s XRP, Dogecoin, and Cardano’s Ada, the next largest cryptocurrencies excluding fiat-pegged stablecoins like Tether and USDC, followed the same path, with declines of between 9% and 11% compared to losses of between 2.5% and 7% as of 3:15 a.m.
Overall, the total cryptocurrency market had lost about $20 billion in value over the course of a day as of 3 a.m. EST, down about 2 percent from the previous day.
Why is Bitcoin falling in value and the cryptocurrency market crashing?
Bitcoin’s sell-off on Monday threatens to continue a dismal streak of weeks of decline for the popular cryptocurrency as it slides from record highs in March. The fall comes amid decreasing interest In cryptocurrency exchange-traded funds (ETFs), uncertainty monetary policy and fears that Tokyo’s crypto exchange is bankrupt Mount Gox could trigger a collapse if it keeps its promise to repay creditors. The exchange was once one of the world’s largest cryptocurrency platforms, but filed for bankruptcy a decade ago after hackers stole most of its crypto assets between 2011 and 2014. Bitcoin was trading at about 10 times higher on Monday than it was when the exchange filed for bankruptcy, and today the bitcoin haul is worth north of about $58 billion, according to CNBC. The exchange managed to recover some funds after filing for bankruptcy, tokens worth about $9 billion today, and markets have responded to what is expected to be a massive Bitcoin sell-off as creditors cash in at a much higher price than when they lost the crypto tokens. Bitcoin makes up more than half of the total cryptocurrency market value, and its fortunes tend to be mirrored by the overall market and smaller crypto tokens.
Tangent
Mt. Gox is not the only factor behind the cryptocurrency market crash and the German government is too make waves hastily selling hundreds of millions of dollars worth of Bitcoin in exchange for fiat currency. Berlin has sent its cryptocurrency reserves to exchanges like Coinbase, Bitstamp and Kraken since June, as the European government unloads and liquidates assets it has seized from various criminal groups. The transfers have raised concerns about significant sell-offs on the market and, second According to Arkham Intelligence, Germany still has approximately $2.2 billion in Bitcoin.
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