Bitcoin is under pressure again on concerns about possible sales of the token by creditors of the failed Mt Gox exchange, which has begun returning a roughly US$8-billion hoard of the largest digital asset.
The original cryptocurrency slid about 5% to trade at US$54 400 as of 9.25am on Monday in Singapore, some $19 000 below March’s record high. Smaller tokens such as ether, XRP and the meme-crowd favourite dogecoin sank too.
Sentiment has also been hampered by signs of German government disposals of seized bitcoin, while global markets as a whole are in a cautious mood as investors assess the results of weekend elections in France.
Once the world’s biggest bitcoin exchange, Tokyo-based Mt Gox was hacked in 2011 and went bankrupt in 2014. The long-awaited return of tokens to creditors has put the focus on a potential wall of supply coming into the market.
The big question for digital assets is when the “overhang” of sales related to Mt Gox and Germany will lift, Chris Weston, head of research for Pepperstone Group, wrote in a note.
Bitcoin surged to all-time peak in the first quarter, lifted by demand for inaugural US exchange-traded funds for the digital asset. The inflows have since moderated and the token’s year-to-date lead over assets such as stocks is rapidly eroding. — Suvashree Ghosh, (c) 2024 Bloomberg LP
