Blockchain
Cryptocurrency Market Bloodbath as Mt. Gox Bitcoin (BTC) Settlement Nears
Cryptocurrencies tumbled on Friday as investors focused on the nearly $9 billion payment to users of Mt. Gox Bitcoin Exchange Collapse.
Bitcoin price fell nearly 3% to $56,571.00, according to Coin Metrics. Previously, the world’s largest cryptocurrency had plunged to as low as $53,513.55, marking its first time trading below the $55,000 level since Feb. 27.
Meanwhile, rival token Ether dropped about 5% to $2,971.68.
According to data from CoinGecko, at one point the entire cryptocurrency market had lost more than $170 billion in total market capitalization in a 24-hour period.
On Friday, Mt. Gox bankruptcy trustee Nobuaki Kobayashi said in a declaration that it has begun making refunds in bitcoin and bitcoin cash to certain creditors through a number of designated cryptocurrency exchanges.
The Mt. Gox trustee did not specify how much money was transferred to these exchanges.
He stressed that the remaining funds will be returned to creditors once a number of conditions are met, including confirmation of the validity of the registered accounts and completion of discussions between the trustee and the designated cryptocurrency exchanges.
The trustee is still working to ensure that repayments “can be made in a safe and secure manner,” Kobayashi wrote, urging “creditors eligible for rehabilitation to wait a while.”
According to blockchain analytics firm Arkham Intelligence, this all happened after a small amount of bitcoin was moved from wallets associated with Mt. Gox; the most significant movement was a $24 transfer to Japanese cryptocurrency exchange Bitbank.
Bitbank is among the beneficiaries listed to support the refunds.
Recently, the world’s largest cryptocurrency has come under pressure from news of the collapse of bitcoin exchange Mt. Gox which is preparing the distribution of approximately 9 billion dollars of coins to users.
This dumping of coins on the market is should lead to some significant sales action.
The cryptocurrency price crash has led to massive liquidations in derivatives markets, according to cryptocurrency data firm Coinglass, which suggests that 229,755 traders had positions worth a total of $639.58 million liquidated in the past 24 hours. Of that amount, $540.46 million were long trades, which are financial positions taken when an investor expects the price of an asset to rise over the long term.
Adding to the pressure on cryptocurrency markets, the German government on Thursday sold about 3,000 bitcoins, worth about $175 million at today’s prices, from a pile of 50,000 bitcoins seized in connection with the Movie2k movie piracy operation, according to Arkham Intelligence.
Arkham, who is monitoring Germany’s bitcoin wallet, noted that the government still holds more than 40,000 bitcoins, worth more than $2 billion.
Industry insiders still expect bitcoin prices to rise again towards the end of the year, once the expected short-term selling pressure from the Mt. Gox redemptions subsides.
Analysts at crypto data and research firm CCData said in a report on Tuesday that bitcoin had not yet reached the at the top of its current appreciation cycle and will likely reach a new all-time high.
Historical market “cycles” have shown that Bitcoin’s so-called halving event, which reduces the supply of new Bitcoins on the market, has always preceded a period of price expansion that can last between 12 and 18 months “before producing a cycle peak,” CCData said in its report.
The last bitcoin halving took place on April 19th of this year, so those historic times have yet to pass.
“Furthermore, we have observed a decline in trading activity on centralized exchanges for nearly two months after the halving event in previous cycles, which appears to have mirrored this cycle. This suggests that the current cycle could expand further into 2025,” CCData said.
Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told CNBC: “Box of squeaks” Monday that he Still Sees Bitcoin Hit $150,000 Despite ‘Surge’ From Impending Mt. Gox Cashout of tokens to creditors.
“If I were a cryptocurrency investor, knowing that one of the big swings would disappear in July, I would think that was a good reason to expect a pretty sharp rebound in the second half of the year,” Lee said.
Investors are still waiting for the Launch of an ether exchange-traded fund in the United States, which would follow the approval of the first U.S. spot bitcoin ETF in January.
In May, the U.S. Securities and Exchange Commission approved a rule change that would open the way for ETFs that buy and hold ether.
Among the companies planning to launch their own ether ETFs are VanEck, BlackRock, Bitwise and Galaxy Digital.