The global cryptocurrency market has lost $170 billion U.S. in market value as fears grow about the potential impact of the Mt. Gox %Bitcoin (CRYPTO: $BTC) distribution.
Bitcoin’s price fell as low as $54,500 U.S. in the last 24 hours, the first time it has been below the $55,000 U.S. level since February of this year.
%Ethereum (CRYPTO: $ETH), the second largest cryptocurrency, saw its price decline as mush as 7% to $2,900 U.S. in overnight trading.
Smaller cryptocurrencies such as %Cardano (CRYPTO: $ADA) and %Litecoin (CRYPTO: $LTC) have also seen their prices plunge, with some down as much as 13%. Prices for some meme coins have dropped 20%.
The selloff comes as investor worries grow over the payout of nearly $9 billion U.S. worth of Bitcoin to former clients of the bankrupt crypto exchange Mt. Gox.
Mt. Gox collapsed in 2014 after a series of Bitcoin thefts cost the exchange $59 billion U.S. worth of losses at current market prices.
After a decade of lawsuits and court battles, the exchange is now planning to repay its 20,000 creditors. Disbursements will occur primarily in Bitcoin.
While the repayment is good news for investors who have waited years to be made whole, the compensation comes as the price of Bitcoin has risen more than 10,000% in the last
decade.
Analysts are warning that the repayment to Mt. Gox investors will lead to huge sales of Bitcoin over the coming weeks as investors lock in their massive gains.
When Mt. Gox shutdown in February 2014, Bitcoin was trading at $600 U.S. per digital token.
Earlier this week, analysts at %JPMorganChase (NYSE: $JPM) warned of negative price action in Bitcoin following the Mt. Gox disbursement.
That volatility is now occurring as the trustee for the Mt. Gox bankruptcy estate begins making repayments in Bitcoin to creditors of the defunct crypto exchange.
At the start of this week, Bitcoin had been trading near $63,000 U.S. The price of the biggest cryptocurrency has fallen nearly 15% in only a few days.
However, despite the current decline, Bitcoin’s price remains up 25% on the year.