Bitcoin Drops Due to US Political Issues and Mt. Gox Sale Worries

Bitcoin has dropped for the third day in a row, getting close to its lowest value since February. This decline is due to uncertainty in US politics and fears that creditors of the defunct Mt. Gox exchange might sell their Bitcoin. On Thursday, Bitcoin fell by as much as 2.7% before slightly recovering to a 1% loss, trading at $58,875 by noon in Singapore. Other cryptocurrencies like Solana and Dogecoin also went down.

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Investors are worried about President Joe Biden's future in politics. If Biden decides not to run for reelection, a stronger Democratic candidate could challenge former President Donald Trump, who supports the crypto industry.

At the same time, Mt. Gox administrators are returning over 137,000 Bitcoin to creditors. The market is nervous about how much of this $8 billion in Bitcoin might be sold, along with concerns about the US and German governments selling seized Bitcoin.

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"A stronger Democratic candidate who might not support crypto is a concern," said Richard Galvin, co-founder of Digital Asset Capital Management. "But the bigger issue for Bitcoin right now is the potential selling from Mt. Gox creditors and the government."

Challenges for Bitcoin Miners

Bitcoin miners, who use a lot of energy to keep the network running, are still dealing with the financial impact of April’s halving event, which reduced the number of new Bitcoin they receive as rewards. Because of this, some miners are selling parts of their Bitcoin holdings.

"Bitcoin continues to face selling pressure from miners," said Noelle Acheson, author of the Crypto Is Macro Now newsletter.

Cryptocurrency sentiment can change quickly. Weak US economic data could lead to expectations of more relaxed policies from the Federal Reserve, which might boost the market. The potential approval of US exchange-traded funds (ETFs) for Ether could also improve the overall mood.

US political developments are also being closely watched. Matt Hougan, Chief Investment Officer at Bitwise Asset Management Inc., suggested that a new Democratic candidate could be good for the crypto sector. He noted that Washington's attitude towards digital assets has become more favorable over the past year.

Traders are watching Bitcoin charts to see if important technical levels hold. Recently, Bitcoin fell below its six-month moving average, which historically signals further losses.

Also Read: Bitcoin Mining Sparks Technological Advances and Future Innovations