Below $57K as Mt. Gox Starts Repayments to Creditors

Bitcoin prices experienced a significant drop on Friday, reaching a four-month low, as the defunct cryptocurrency exchange Mt. Gox began repaying its creditors. This recent price decline was further compounded by reports of German police transferring approximately $75 million worth of cryptocurrency, confiscated from a piracy website, onto exchanges. This action raised concerns about a potential sell-off reminiscent of earlier this year.

In the last 24 hours, Bitcoin fell by 2.9%, settling at $56,539.7, with an almost 11% decrease over the past week. Although the cryptocurrency dipped below $55,000 earlier in the day, it regained some value following the release of new U.S. jobs data.

### Mt. Gox Initiates Repayments

The steep decline in Bitcoin’s value coincided with investors focusing on the impending payouts to users of the collapsed Mt. Gox exchange, which amount to nearly $9 billion. Nobuaki Kobayashi, the trustee managing the Mt. Gox bankruptcy estate, confirmed that repayments in Bitcoin and Bitcoin Cash are now being made to some creditors via designated exchanges. However, he did not disclose the specific amounts transferred.

Kobayashi indicated that remaining funds would be distributed once certain conditions are satisfied, including verification of registered accounts and completion of discussions between the trustee and the chosen exchanges. He reassured that efforts are underway to ensure repayments are handled “safely and securely” and encouraged eligible creditors to be patient.

This announcement followed the transfer of a small amount of Bitcoin from wallets associated with Mt. Gox, as noted by blockchain analytics firm Arkham Intelligence. The most significant transaction was a $24 transfer to Bitbank, a Japanese cryptocurrency exchange involved in facilitating repayments. Concerns over potential further sales by German authorities also contributed to the negative sentiment.

### Broader Crypto Market Dynamics

The overall cryptocurrency market mirrored Bitcoin’s sharp decline, influenced by the prevailing political uncertainty surrounding the U.S. presidential election and interest rate concerns. Speculation regarding President Joe Biden possibly stepping down as the Democratic candidate for the upcoming 2024 elections has created apprehension in crypto markets, particularly fears that his successor may adopt an even more negative stance towards cryptocurrency.

Anticipation ahead of key U.S. economic data also left traders hesitant, despite a recent drop in interest rate expectations. This hesitance contributed to the broader cryptocurrency market underperforming compared to a rally in the stock market, which it typically tracks.

The world’s second-largest cryptocurrency saw a significant decrease of 4.8%, hitting a near two-month low at $2,992.33, negating gains made in late May. Other altcoins also suffered losses, with one down by 4%, and meme tokens experiencing declines of around 4% each. This overall downward trend can be partially attributed to low trading volumes due to the July 4 holiday in the U.S., compounded by waning excitement over the potential approval of a spot Bitcoin exchange-traded fund. In total, the cryptocurrency market has lost over $170 billion in market capitalization within 24 hours.

### Impact on Crypto-Related Stocks

The downturn in Bitcoin prices was mirrored by declines in cryptocurrency-related stocks on Friday. MicroStrategy, the largest corporate holder of Bitcoin, saw its stock plummet by over 9%. Similarly, bitcoin mining companies Riot Platforms and Marathon Digital Holdings experienced drops of 7% and 6.3%, respectively. Other companies such as CleanSpark, Cipher Mining, and Coinbase also reported notable declines in their stock prices, ranging from 4.6% to 8.6%.