Bitcoin Drops Below $60,000 as Mt.Gox Fears Resurface

Crypto markets are trading lower on renewed fears surrounding the impending Mt. Gox Bitcoin repayments.

Bitcoin fell 3%, trading as low as $59,700, while Ethereum slipped by 3.5%. Solana and Polkadot also dropped 5%.

Nearly all of the top 100 digital assets by market capitalization have posted losses over the past 24 hours, with Ethereum Name Service (ENS), Dogwifhat (WIF) and Fantom (FTM) dropping more than 10%.

A pressure point for the cryptocurrency market is the anticipated release of Bitcoin from the defunct Mt. Gox exchange, which is expected to begin this month.

"The Mt Gox release is also slated to happen this week," QCP Capital Broadcast noted in its Telegram group. "This overhang of up to 140,000 BTC should continue to weigh on markets, especially since the exact release schedule is unknown right now."

Repayment Plans

On June 24, Mt. Gox revealed plans to start distributing Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors in July. Established in 2010, Mt. Gox quickly became the world's largest Bitcoin exchange but suffered a hack in 2014 that resulted in the loss of 850,000 BTC belonging to 240,000 users.

In September 2023, the trustee announced that creditors would receive partial repayments, including 142,000 BTC, 143,000 BCH, and $510 million in fiat currency by October 2024. Creditors have been waiting for these repayments for nearly a decade.

OKX Chief Commercial Officer Lennix Lai believes that sell-off concerns relating to Mt. Gox will likely be short-term.

“Many of Mt. Gox's early users, as well as creditors, are long-term Bitcoin enthusiasts who are less likely to sell all of their Bitcoin immediately,” he said. “Taking reference from previous sell-offs by law enforcement, such as the Silk Road case, they did not result in a sustained catastrophic price drop, which indicates that the market tends to hold sufficient liquidity to absorb the sell-off."

In the past 24 hours, 59,593 traders were liquidated for $168 million, according to CoinGlass. The largest single liquidation order occurred on OKX, involving an ETH-USD swap valued at $4 million.

Michael Van de Poppe, CEO of MN Trading, believes that Bitcoin is looking for a higher low. “It seems very likely that we’ll be looking at the $61-61.5K area,” he tweeted. “A slow grind upward is what I’m expecting for the markets in July."

Meanwhile, U.S. stock markets continued their upward trajectory. The S&P 500 and the Nasdaq Composite climbed 0.5% and 0.9%, respectively.