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Bitcoin Hits 2-Month Low on Election Uncertainty, Mt Gox Flows
By Sameer Manekar
(Reuters) – Bitcoin fell to a two-month low on Thursday, extending a month-long slide, as uncertainty over the U.S. presidential election and reports of bitcoin supply from a former Tokyo-based cryptocurrency exchange weighed.
Bitcoin fell more than 2% to $57,843, its lowest level since May 2, and has lost more than 6% so far this week.
The world’s largest cryptocurrency has been under pressure in recent months, and its decline accelerated this week after the first debate between US presidential candidates Joe Biden and Donald Trump raised the specter of Biden being replaced as the nominee.
“If he (Biden) were to be replaced, and there’s a lot of talk about it, that person might not be pro-crypto,” said Josh Gilbert, a market analyst at digital brokerage firm eToro.
Bitcoin had a strong start to the year after the launch of exchange-traded funds in the United States, pushing it to a record high of $73,803.25 in mid-March as investors poured in. However, the rally has fizzled out, with Bitcoin down more than 21% since then.
According to analysts, a politically charged environment, with elections underway in France and Great Britain, is leading to some reduction in risk, in parallel with the changing probabilities in the US election campaign.
Analysts also pointed to reports that Mt. Gox, the world’s largest cryptocurrency exchange before it closed in 2014, is paying off its creditors, which could drag bitcoin lower if those creditors sell their tokens.
“It’s expected that some of those original bitcoin buyers will start selling into the market, which is a pretty big chunk,” said Tony Sycamore, a market analyst at IG.
Sycamore added, however, that although this is a period of consolidation for the cryptocurrency after strong gains at the start of the year, it could retest the March highs and possibly push towards $80,000.
Ether, another major cryptocurrency, fell more than 1% to $3,213.0, and is down more than 22% from its mid-March highs.
(Reporting by Sameer Manekar from Singapore; additional reporting by Ankur Banerjee from Singapore; editing by Vidya Ranganathan and Jan Harvey)