Bitcoin prices tumbled to a four-month low on Monday, as the cryptocurrency market continues to see steep declines that have been in play for weeks now. Not helping: increasing talk of massive sell-offs by the German government – coupled with fears that the creditors of the now-bankrupt crypto exchange Mt Gox are in a liquidation mode to cover their claims. Recently, there’s been increasing apathy about cryptocurrency ETFs, and no clear direction when it comes to monetary policies. Meanwhile, Mt Gox – which went bankrupt after a significant hack – plans to pay back creditors with funds it has recovered (that’s about $9 billion today). Already, this news has triggered fears of a market crash.
Further, the inherent volatility in the crypto market is not exclusively linked to the Mt. Gox debacle. Factors such as the unpredictable large-scale sell-off of sizable Bitcoin reserves by the German government also contribute to market turbulence. Since June, Germany has been transferring cryptocurrencies seized from criminal activities to exchanges such as Coinbase, Bitstamp and Kraken, with around $2.2 billion worth of Bitcoin still in its coffers. Germany’s actions have raised market jitters over the possibility of further blockbuster sell-offs, which in turn dampens investor sentiment and impacts the value of Bitcoin.
Source: Forbes
