Mt. Gox Starts Distributing Funds to Creditors, Bitcoin Price Drops Under $54,000
- WBOYOriginal
- 2024-07-11 19:30:44571browse
The Mt. Gox repayments were always expected to be a catalyst for downward pressure on Bitcoin.
Nearly a decade after filing for bankruptcy protection, Mt. Gox has finally begun distributing funds to creditors, a move that had been widely anticipated to put downward pressure on the price of bitcoin.
Indeed, the news saw the price of bitcoin sell off sharply, briefly dropping below $54,000 during Asian trading hours on July 5.
According to a notice published on the same day, the Japan-based exchange announced that the exchange’s Trustee Nobuaki Kobayashi had commenced repayments in Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors as per the Rehabilitation plan.
Onchain analytics firm Arkham flagged a transaction from a wallet address linked to Mt. Gox, which showed the movement of 47,228 BTC — valued at around $2.71 billion at current prices — from cold storage to a new wallet.
The firm also noted that a total of 16,000 BTC had been moved by the German government from cold storage on centralized exchanges and external wallets, an activity that is likely being used to fund an over-the-counter trade, according to Arkham.
As selling pressure intensified, the market-leading digital asset dropped to a low of $53,717 and was trading almost 8% lower over the last 24 hours. Notably, liquidations in the digital asset market were also significant during this period.
According to data from CoinGlass, over $685 million was liquidated from crypto traders, with the majority of the liquidations being in long positions. Bitcoin longs alone saw $185 million liquidated, while Ethereum longs saw $145 million liquidated.
The single largest single liquidation order occurred on Binance on an ETH/USDT pair and was valued at $18.5 million.
Some industry watchers, such as Galaxy’s head of Research Alex Thorn, have suggested that fewer coins will ultimately be distributed by Mt. Gox and the sell pressure on Bitcoin will be less than what market participants are expecting.
However, at the time of writing, the market sentiment appeared to be largely negative, with the crypto Fear and Greed indicator shifting deeper into “fear” territory.
“Markets have continued to bleed, and social media is now showing historic levels of FUD. It is rare for an hour to go by where there are more mentions of “sell” than there are “buy” across crypto forums,” noted market intelligence platform Santiment on X.
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