Bitcoin heads for worst week in months as Mt Gox payouts loom

Bitcoin heads for worst week in months as Mt Gox payouts loom
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SYDNEY (Nov 19): Bitcoin fell to a one-month low on Friday (Nov 19) and was headed for its worst week in six months as traders booked profits from a long rally and were spooked by expectations that creditors of collapsed crypto exchange Mt Gox might liquidate their payments.

The largest cryptocurrency by market value, Bitcoin was down 1.6% at US$55,980 (about RM234,024) by the mid-session in Asia, its lowest since mid-October and 20% below last week's record high.

"Selling pressure has been quite constant," said Matthew Dibb, the chief operating officer of Singapore-based crypto asset manager Stack Funds, who expects that it could continue until the token finds support at around US$53,000.

For the week, Bitcoin has fallen 14% and through its 50-day moving average. It has gained more than 90% this year.

Dibb said there was profit taking and concerns about more selling in the wake of a Tokyo court signing off on plans to repay creditors of Mt Gox, a crypto exchange which collapsed in 2014 after losing half a billion dollars in Bitcoin.

"Those affected will receive a large sum of Bitcoin, likely happening in 1Q (the first quarter) or 2Q of 2022. This has brought some fear into the market on a longer-term horizon," he said on expectations that those creditors are likely sellers.

Ether, the second largest cryptocurrency by market value, was steady near a three-week low at US$4,014 on Friday but set for a 14% weekly loss.

Both Ether and Bitcoin also seem to have suffered as the mood in global markets has been cautious over recent days amid concerns about economic growth, interest rates and inflation.

"Bitcoin's long-term outlook remains bullish," said OANDA analyst Edward Moya.

"But the waters over the next few months will be rough as institutional investors look to see if the Fed (US Federal Reserve) will be forced to raise rates sooner and trigger a broad-based sell-off of risky assets that include Bitcoin."