Bitcoin is under pressure again amid concerns that creditors of the defunct Mt. Gox exchange may sell $8 billion in bitcoin.

Bitcoin fell about 5% in Asian trading on Monday, trading at $54,400, about $19,000 below its all-time high in March. Smaller tokens such as Ethereum, Ripple (XRP) and the crowd favorite Dogecoin also fell.

Signs that the German government is dealing with seized bitcoin also weighed on sentiment, while overall global markets were cautious as investors assessed the results of France’s weekend elections.

Tokyo-based Mt. Gox, once the world's largest bitcoin exchange, was hacked in 2011 and went bankrupt in 2014. The long-awaited return of bitcoins to creditors has put the spotlight on potential supply in the market. The trustee of Mt Gox announced on Friday that he had "repaid some creditors in bitcoin and bitcoin cash." According to blockchain research firm Arkham Intelligence, the trustee has transferred hundreds of millions of dollars in tokens to Bitbank and other Mt Gox accounts. The trustee said that once the details of other creditors are confirmed, they will be paid "quickly." Many creditors are expected to receive repayments by the end of October.

Chris Weston, head of research at Pepperstone Group, wrote in a note that a big question facing digital assets is when the “backlog” of sales related to Mt. Gox and the German government will be unwound.

Stephane Ouellette, chief executive of FRNT Financial Inc., said traders may have overreacted to the Mt. Gox repayments. He said the potential liquidation of $2.3 billion worth of bitcoin by the German government poses a greater immediate threat to the market. “Not every bitcoin they return is going to be sold,” Ouellette said. “The market is struggling with a narrative, and the bitcoin bulls are licking their lips right now, hoping this will be a great buying opportunity.”

Bitcoin surged to an all-time peak in the first quarter, fueled by demand for digital asset exchange-traded funds in the U.S. Since then, inflows into bitcoin ETFs have slowed, and bitcoin’s lead over assets like stocks is shrinking rapidly so far this year.

Article forwarded from: Jinshi Data