Monday, July 22, 2024
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Bitcoin price falls as Mt Gox begins repayments

by xyonent
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Bitcoin prices plummeted this week, dropping below $55,000 for the first time since February after the now-shuttered Mt. Gox exchange began distributing billions of dollars in debt.

Mt Gox Announces The company has begun paying back creditors, ending a long wait since its bankruptcy in 2014. The Japan-based exchange plans to distribute around $9 billion worth of Bitcoin, Bitcoin Cash and fiat currency.

The news put a lot of selling pressure on Bitcoin, causing it to fall more than 6% to trade near $54,000 on Friday. For Bitcoin and the cryptocurrency market as a whole, the decline has resulted in a loss of more than $170 billion in 24 hours.

On Thursday evening, Mt. Gox sold about 47,000 bitcoins worth about $2.7 billion. Store your cold storage wallet in a separate addressWhile the intentions are unclear, the transfer has raised concerns that creditors may sell off some of the recovered coins.

The payout comes after a lengthy bankruptcy process for the Mt. Gox exchange, which was the largest cryptocurrency exchange at the time, handling 70% of all Bitcoin transactions, after a massive hack in 2014 that resulted in the loss of 850,000 Bitcoin.

Paying back creditors marks a big step towards resolving Mt. Gox’s decade-long bankruptcy case, but the influx of previously lost coins threatens to change the dynamics of supply and demand.

Some analysts have predicted that selling pressure from dividends could send Bitcoin prices as low as $50,000 in the short term, while ongoing remittances from the German government are also weighing on the market.

But others argue that the amount is only a fraction of Bitcoin’s daily trading volume, and that the impact will be limited because most creditors are long-term investors who are unlikely to sell large amounts of their holdings, they say.

Still, analysts widely expect big volatility between the Mt. Gox distribution and the start of the German government sale in July.

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