What Caused Bitcoin’s Sharp Drop Today?

Bitcoin (BTC) has demonstrated a down trend for much of June and in the early days of July. The coin dropped again during the late hours of Tuesday to fall by 4%.

Now, Bitcoin is down to $60,266 (BTC/USD), and that low level is probably going to cause the coin even more trouble. The recent upswing to $63K had many investors feeling hopeful about Bitcoin’s prospects to get back to $70K and perhaps set a new record high.

Those have been dashed once more, and Bitcoin is now struggling to stay above the psychologically significant $60K level. What is the reason for this quick drop? Some industry insiders suspect it has to do with the defunct crypto exchange Mt. Gox and the legal requirements to unload about $9 billion in crypto coins.

What Happened with Mt. Gox?

The Japanese-based cryptocurrency exchange has to pay back those who suffered from a major heist about 10 years ago. That’s good news for those who have been left in the lurch, waiting on repayment. It could be catastrophic for the crypto industry, though, if the market is flooded with coins all at once.

Thousands of users are expecting payouts, which should come up to about 950,000 bitcoins. The price of Bitcoin has gone up significantly since the heist, which is going to make many of those victims quite rich.

The payouts were expected to start in early July, so we could be seeing some of that affect the market, and it could continue to have an impact on the price of Bitcoin over the next few weeks.

This is not a situation where investors can do very much in order to improve things, but if they wait it out, the market should settle back down after the payouts have been made. That could leave Bitcoin with a decreased value, though, if the supply of active Bitcoin is much higher than it was previously.