Markets
Crypto Markets Crash Amid Mount Gox Redemption Fears
More than $313 million in leveraged positions were liquidated in the last 24 hours.
Crypto markets fell Monday morning after $584 million in weekly net outflows from digital investment products, bringing the total to more than $1.1 billion over the past two weeks.
Bitcoin plunged 5% to trade below $61,000, while Ethereum fell by almost 6%. Solana slipped 4% and Polkadot 2%
Data from CoinGlass watch that in the last 24 hours, 92,311 traders were liquidated for a total of $313 million. The largest single liquidation of $15.36 million took place on Binance, involving the BTC-USDT pair.
According to the latest CoinShares reportglobal exchange-traded products recorded their lowest trading volumes since the launch of US spot Bitcoin ETFs in January, at just $6.9 billion for the week.
“We believe this is a reaction to investor pessimism about the prospect of interest rate cuts by the FED this year,” said James Butterfill, head of research at CoinShares. He added that continued capital outflows suggest a “real correction is underway.”
Michael van de Poppe, CEO of MN Trading, believes This correction is focused on news for Bitcoin and altcoins.
“Maybe because of the news from Mount Gox. Reimbursements start in July,” he said. “Markets are falling significantly, but it is more than likely that this event will result in overvaluations relative to where they should be. This may be the lowest.
Mt. Gox, once the largest Bitcoin exchange, suffered a major exploit in 2014, losing 850,000 Bitcoins belonging to 240,000 users. In September 2023, its trustee announced that creditors would receive a partial repayment of 142,000 BTC, 143,000 BCH, and fiat currency totaling $510 million by October 2024.
Mt. Gox users will start receiving refunds in Bitcoin (BTC) and Bitcoin Cash (BCH) departure beginning of July.
US stock markets are relatively calm, with the S&P 500 up 0.3% and the Nasdaq down 0.4%. The Dow Jones Industrial Average jumped nearly 1%, according to to Yahoo Finance data.
Data on personal consumption expenditures for May, the Federal Reserve’s preferred measure of inflation, will be released Friday.