Published : 5 months ago, on 04/07/2024

Bitcoin hits 2-month low on election uncertainty, Mt Gox flows

By Sameer Manekar

(Reuters) – Bitcoin slid to a two-month low on Thursday, extending a month-long fall, as uncertainty over U.S. presidential elections and reports of bitcoin supply from a defunct Tokyo-based crypto exchange weighed.

Bitcoin fell more than 2% to $57,843, its lowest since May 2, and has lost more than 6% so far this week.

The world’s biggest cryptocurrency has been under pressure in recent months, its slide accelerating this week after the first debate between U.S. presidential candidates Joe Biden and Donald Trump raised the spectre of Biden being replaced as a candidate.

“If he (Biden) is to be replaced, and there’s a lot of conversation going on around that, that person may not be pro-crypto,” Josh Gilbert, a market analyst at digital brokerage eToro, said.

Bitcoin had a strong start to the year after the launch of exchange-traded funds in the U.S., propelling it to a record $73,803.25 in mid-March as investors poured in. However the rally has fizzled, with bitcoin losing more than 21% since then.

A politically charged backdrop, with ongoing elections in France and Britain, is resulting in some risk reduction, analysts said, alongside the changing odds in the U.S. election campaign.

Analysts also pointed to reports that Mt. Gox, the world’s leading exchange for cryptocurrencies before it went defunct in 2014, is repaying its creditors, which could be dragging bitcoin lower if those creditors offload their tokens.

There is an anticipation that some of those original buyers of bitcoin will start to sell on the market, which is a fairly big chunk,” Tony Sycamore, a market analyst at IG, said.

Sycamore added however that while this was a period of consolidation for the cryptocurrency after strong gains earlier this year, it could retest the March highs and probably push up towards $80,000.

Ether, another major cryptocurrency, was trading more than 1% lower at $3,213.0, and is down more than 22% from its mid-March highs.

(Reporting by Sameer Manekar in Singapore; Additional reporting by Ankur Banerjee in Singapore; Editing by Vidya Ranganathan and Jan Harvey)