Bitcoin is losing its dominance in the crypto market after the news of Mt. Gox

Bitcoin (BTC) is generally less volatile than altcoins, but this Monday had a notable exception. 

Bitcoin saw a more severe decline than others cryptocurrencies , which led to a significant decline in its market dominance. The drop underscores concerns about the potential impact of upcoming payments to victims of the hacking attack on Mt. Gox in 2014.

The market dominance of BTC , or its share of the total value of the crypto market, fell to 54.59% as of June 25th, posting its biggest one-day drop since January 24th on the 12th. This suggests that investors have withdrawn funds from Bitcoin at a faster rate than from other cryptocurrencies. 

The sell-off according to many analysts was triggered by the news that the defunct crypto exchange Mt. Gox plans to distribute 140,000 BTC to victims of hacking attacks in July. That announcement fueled concerns that recipients would sell their holdings after receiving them, potentially sending prices down. 

These concerns have been further fueled by increased selling pressure from miners and outflows from spot Bitcoin exchange-traded funds (ETFs) since June 7.

Heightened fears of a selloff also fueled demand for short-term BTC put options on the Deribit exchange tracked by Amberdata. Put options provide protection against a decline in the price of the asset. The seven-day and one-month call-put spreads, which reflect the premiums traders are willing to pay for asymmetric payments in either direction within a week and a month, turned negative, indicating increased demand for put options.

Despite these concerns, some market watchers believe that the actual selling pressure from benefits from Mt. Gox can be more moderate. Tagus Capital noted in a market commentary that while the exact amount of Bitcoin that will be distributed following the potential Mt.Gox token sales has not been specified, it is part of a broader recovery plan that includes 142,000 BTC, 143 Bitcoin Cash ( BCH ) and fiat currency totaling ¥69 billion ($432 million).

From Tagus Capital as well they assumed , that the creditors of Mt. Gox may prefer to hold their BTC instead of selling it immediately. These lenders are considered long-term investors who have previously turned down offers to pay out in US dollars and may prefer to hold on to their assets to avoid capital gains taxes on sale.