Bitcoin Drops to $54k as Mt Gox Initiates Distributions

Bitcoin experienced a significant drop in early Asian trading on Monday, reversing a slight recovery observed over the weekend and reaching a low not seen in over four months. This decline raised concerns regarding a potential influx of tokens from the now-defunct cryptocurrency exchange Mt. Gox.

The cryptocurrency fell 5.8% in the last 24 hours, reaching $54,601.70 by 21:28 ET (01:28 GMT), nearing its lowest point since late February. The price also dipped below the crucial support level of $55,000.

In recent weeks, Bitcoin has faced considerable losses driven by worries about token distributions linked to Mt. Gox. Last week, the trustees of the exchange announced they had started returning tokens that were stolen during a 2014 hack to creditors via various exchanges, although the exact number of tokens being disbursed was not disclosed.

Earlier this year, wallets associated with Mt. Gox were seen moving about $9 billion worth of Bitcoin. This exchange has remained a contentious issue within the cryptocurrency markets. Traders speculate that the significant rise in Bitcoin’s price over the past decade may prompt creditors to sell their recovered tokens on the open market, thereby increasing the overall supply.

These concerns triggered widespread selling pressure on Bitcoin, with numerous large wallet holders also engaging in sales of their assets. This negative sentiment surrounding Bitcoin extended into the broader cryptocurrency market, resulting in a 7.3% decline in the second-largest cryptocurrency, reaching a two-month low.