Bitcoin Falls Sharply as Mt Gox Token Distribution Woes Return to Haunt Crypto Market

Bitcoin fell sharply in early Asian trade on Monday, reversing a modest rebound seen over the weekend and hitting an over four-month low on concerns over a flood of token supply from defunct crypto exchange Mt Gox.

Bitcoin tumbled on Monday, hitting a four-month low and reversing a small rebound seen over the weekend, over concerns that a flood of tokens from defunct crypto exchange Mt Gox will hit the market.

The world’s biggest cryptocurrency dropped 5.8% over the past 24 hours to $54,601.7 by 21:28 ET (01:28 GMT), coming close to its weakest level since late-February. The token also slipped below a key support of $55,000.

Bitcoin has been nursing steep losses over the past two weeks over concerns regarding the Mt Gox token distributions. Trustees of the exchange said last week that they had started returning tokens stolen during a 2014 hack to creditors via several exchanges, though they did not state how many tokens were being returned.

Wallets linked to the exchange were seen moving around $9 billion in Bitcoin earlier this year.

Mt Gox has been a major talking point in crypto markets, with traders speculating that given the massive increase in Bitcoin’s price over the past decade, recipients of the token will be likely to sell it on the open market, increasing the coin’s supply.

Fears of such a scenario led to several Bitcoin “whale” wallets coming online and preparing their holdings for sales, while several traders also dumped the token en masse.

The sell-off in Bitcoin also spilled over into the broader crypto market, with world no.2 token Ether sinking 7.3% to a two-month low.

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