Markets
Bitcoin Stumbles as Mt. Gox and 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 sent prices of other major tokens tumbling amid uncertainty over impending sales by the German government and creditors of failed cryptocurrency exchange Mt. Gox.
Bitcoin prices fell again on Monday.
AFP via Getty Images
Key facts
Bitcoin prices fell more than 6% on Monday morning before paring losses to trade around $55,500 at 3:15 a.m. EST, still down 4% from the same time the previous day.
It’s the lowest price for the world’s leading digital asset in months and is down about $18,000 from an all-time high of just under $74,000 in March, a loss of about a fifth.
Ether, the world’s second-largest cryptocurrency by market capitalization after Bitcoin, followed a similar trajectory, falling more than 7% before recovering to trade around $2,900 at 3:15 a.m. ET, down 4% on the day.
The path was also mirrored by Binance’s BNB, Solana, Ripple’s XRP, Dogecoin and Cardano’s Ada — the next-largest cryptocurrencies, excluding stablecoins pegged to traditional currencies like Tether and USDC — with declines of between 9% and 11%, compared with losses of between 2.5% and 7% as of 3:15 a.m.
Overall, the total cryptocurrencies Marketplace lost about $20 billion in value over the course of a day as of 3 a.m. EST, down about 2% from the previous day.
Why is Bitcoin down and the cryptocurrency market falling?
Bitcoin’s sell-off on Monday threatens to continue a dismal weeks-long decline for the popular cryptocurrency as it slides from record highs in March. The drop comes amid decreasing interest in cryptocurrency exchange-traded funds (ETFs), uncertainty about monetary policy and fears that the bankrupt Tokyo cryptocurrency exchange Mount Gox could trigger a collapse by fulfilling its promise to pay creditors. The exchange was once one of the world’s largest cryptocurrency platforms, but filed for bankruptcy a decade ago after hackers he stole most of its crypto assets between 2011 and 2014. Bitcoin is trading about 10 times higher on Monday than it was when the exchange filed for bankruptcy, and today Bitcoin would be worth about $58 billion, according to CNBC. The exchange managed to recover some funds after filing for bankruptcy, the tokens are worth about $9 billion today, and markets have responded to what is expected to be a massive Bitcoin sell-off as creditors cash out at a much higher price than when they lost the crypto tokens. Bitcoin makes up more than half of 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 cryptocurrency market crash and the German government is also Making waves hastily selling hundreds of millions of dollars worth of Bitcoin for fiat currency. Berlin has been sending its cryptocurrency reserves to exchanges such as Coinbase, Bitstamp and Kraken since June, while the European government unloads and liquidates assets it holds seized of various criminal groups. The transfers raised concerns about significant sales in the market and, according to According to Arkham Intelligence, Germany still holds around $2.2 billion worth of Bitcoin.
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