Bitcoin Price Plunges to Four-Month Low Amid Mt Gox Distribution Fears
Bitcoin price took a sharp nosedive to hit a four-month low on Friday, with concerns about an impending distribution by defunct crypto exchange Mt Gox adding to the selling pressure on the token. German police were also seen transferring about $75 million of confiscated crypto from a piracy website to exchanges, fueling speculation of a mass sell-off.
The world's most popular cryptocurrency slid 8.5% in the last 24 hours to $54,092.3, marking its weakest level since March. Over the past week, Bitcoin has also dropped more than 11%.
The activity in Mt Gox wallets has unsettled the Bitcoin market, as the defunct exchange is set to return stolen Bitcoin from a 2014 hack to its clients. Traders fear that most recipients of the tokens will sell them, given the significant price increase Bitcoin has seen over the past decade.
The uncertainty surrounding the U.S. presidential election and interest rates has also weighed heavily on the broader cryptocurrency market. Speculation that President Joe Biden may withdraw as the Democratic candidate for the 2024 elections has added to the unease, as investors worry about a potential anti-crypto replacement.
Furthermore, concerns about an interest rate cut in September and lackluster performance in stocks have dampened sentiment towards crypto. The second-largest token, Ethereum, dropped 10.5% to $2,902.42, erasing its gains from late May and hitting a two-month low.
Other major cryptocurrencies like Binance Coin, Cardano, and Solana also experienced losses between 7% and 17%. Meme tokens like Shiba Inu and Dogecoin saw even steeper declines, losing over 16% each.
The market downturn was exacerbated by low trading volumes due to the July 4 U.S. market holiday and waning excitement over the approval of a spot Bitcoin exchange-traded fund.
In conclusion, the current state of the cryptocurrency market is tumultuous, with factors like Mt Gox's impending distribution, political uncertainty, and interest rate fears contributing to the decline in prices. Investors should exercise caution and stay informed about the latest developments to navigate these challenging times effectively.