Crypto Markets Plummet on Mt. Gox Repayment Fears

Over $313 million of leveraged positions were liquidated in the past 24 hours.

By: Mehab Qureshi Loading...

Bitcoin symbol with a steep downward-trending arrow

Crypto markets traded lower on Monday morning following $584 million in net weekly outflows from digital investment products, bringing the total to over $1.1 billion in the past two weeks.

Bitcoin plunged 5% to trade under $61,000, while Ethereum dropped nearly 6%. Solana slipped 4%, and Polkadot fell 2%

ETH Price chart
ETH Price

Data from CoinGlass shows that in the past 24 hours, 92,311 traders were liquidated for a total of $313 million. The largest single liquidation of $15.36 million occurred on Binance, involving the BTC-USDT pair.

According to CoinShares’ latest report, global exchange-traded products recorded their lowest trading volumes since U.S. spot Bitcoin ETFs launched in January, at just $6.9 billion for the week.

“We believe this is in reaction to the pessimism amongst investors for the prospect of interest rate cuts by the FED this year,” said James Butterfill, CoinShares’ Head of Research. He added that continued outflows suggest a “true correction is underway.”

Michael van de Poppe, CEO of MN Trading, believes this correction is news-driven for Bitcoin and altcoins.

“Perhaps due to the Mt. Gox news. Repayments starting in July,” he said. “Markets dropping down substantially, but it’s more than likely that this event has some overvaluations in fear than what it should be. Might be the low.”

Mt. Gox, once the largest Bitcoin exchange, suffered a major exploit in 2014, losing 850,000 Bitcoin belonging to 240,000 users. In September 2023, its trustee announced that creditors would receive partial repayment of 142,000 BTC, 143,000 BCH, and fiat currency totaling $510 million by October 2024.

Mt. Gox users will begin receiving repayments in Bitcoin (BTC) and Bitcoin Cash (BCH) starting in early July.

U.S. stock markets are relatively calm, with the S&P 500 up 0.3% and the Nasdaq down by 0.4%. The Dow Jones Industrial Average surged nearly 1%, according to Yahoo Finance data.

Personal consumption expenditure data for May, the Federal Reserve’s preferred inflation measure, will be released on Friday.