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Bitcoin (BTC) Price Hits $65K Despite Mt. Gox Payment Concerns; Ripple’s XRP Leads Crypto Rally
Cryptocurrency’s rebound from last week’s low has shown no signs of stopping with Bitcoin (BTC) reaching its highest price in four weeks on Tuesday.
BTC has climbed above the $65,000 level for the first time since late June, shaking off a dip below $63,000 earlier in the day, while wallets tied to assets of the defunct Mt. Gox exchange $2.8 billion worth of BTC movedwhich will likely prepare to distribute assets to creditors in the coming days.
The cryptocurrency rally has been broad-based, as evidenced by the market benchmark CoinDesk 20 (CD20), which has gained nearly 3% over the past 24 hours, with 16 of its 20 components in positive territory on the day.
The best performer among the major altcoins was XRP (XRP)The native token of the XRP Ledger payment network, rose 9% on Tuesday, extending its weekly gains to 35%.
The token’s rally is being supported by whales, or large asset holders, increasing their holdings, in a sign of belief in higher prices, crypto data provider Santiment underlined.
Another catalyst was the traditional trading power of CME and CF Benchmarks derivatives announcing indices and benchmark rates for XRP. These offerings could increase institutional adoption for XRP, Brad Garlinghouse, CEO of closely related blockchain payments firm Ripple, suggested.
Mt. Gox Selling Pressure ‘Overstated’
As the German BTC sales lag, cryptocurrency investors are pondering how much of the $9 billion worth of Bitcoin about to be distributed to creditors will be pumped into the market to capitalize on the asset’s ten-year appreciation.
Ki Young Ju, CEO of crypto analytics firm CryptoQuant, supported that fears of selling pressure are “overstated” and will not derail the ongoing cryptocurrency rally.
“I believe this distribution will not end the uptrend, as the coins are expected to react to market sentiment similarly to the current bitcoin supply,” he explained in a post X“Unlike the German government sale, Mt. Gox creditors are not forced to sell, so it’s not purely about sell-side liquidity.”
Renowned cryptocurrency and macroeconomic analyst Alex Krüger estimated a maximum drop in the price of bitcoin of 10% if creditors sold off their recovered assets en masse, Ju noted.
CoinMetrics also said that the market should absorb the liquidation of assets by Mt. Gox creditors if it happens in an orderly fashion and spread out over weeks, based on current market depth and Bitcoin trading volumes.
“The distribution of approximately 65,000 BTC (worth approximately $1.95 billion at current prices) could potentially be absorbed by the market within a couple of weeks without causing major disruption, assuming liquidations are carried out gradually and across multiple exchanges,” CoinMetrics analysts wrote in a report on Tuesday.
“However, these results are only indicative of the depth and maturity of the BTC market, but should allay fears of liquidity shortages in the short term.”