The price of Bitcoin, the world’s largest cryptocurrency, fell below $55,000 over the weekend due to significant downward pressure. This decline is attributed to the German government’s large-scale sale of Bitcoin and the ongoing repayment process to creditors of the now-defunct Mt. Gox exchange.
The German government’s decision to offload a substantial amount of Bitcoin has sparked criticism from German parliamentarian Joana Cotar. She argued that the sale was hasty and unwise, suggesting that Germany should consider holding Bitcoin as a strategic reserve currency, similar to discussions in the United States. “Instead of holding Bitcoin as a strategic reserve currency, our government is selling on a large scale,” Cotar said, expressing her disapproval of the policy.
Concurrently, the repayment process for Mt. Gox creditors has added to the market’s instability. Nearly a decade after the exchange’s collapse due to a major hack, creditors are finally receiving their long-awaited funds. On July 5, Mt. Gox announced that users seeking repayment would need to undergo account verification and subscribe to a designated crypto exchange. “We ask eligible rehabilitation creditors to wait for a while,” the exchange stated.
On Thursday, Mt. Gox transferred approximately $2.71 billion worth of Bitcoin, amounting to 47,228.7 BTC. At its peak, Mt. Gox handled up to 80% of the world’s Bitcoin trades. Today, at least 127,000 users are awaiting the restoration of their crypto funds from the Mt. Gox bankruptcy estate.
The combination of these events has significantly impacted Bitcoin’s value. On Friday, its price dropped to $54,600, marking a 6% decline. As of the time of writing, Bitcoin’s value is at $55,243, while Ethereum is trading at $2,904. The high-profile transfers and government sell-offs continue to send shockwaves through the cryptocurrency market.
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