Following the announcement by the bankruptcy trustee of Mt. Gox that it will begin returning Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors starting in July, the cryptocurrency market faces significant selling pressure. Over 140,000 BTC and BCH will be distributed among creditors, prompting Bitcoin to briefly dip below $59,000 during intraday trading. As of the latest update, it has rebounded to $59,962, marking a nearly 6% decrease over 24 hours.
Altcoins have followed Bitcoin’s decline, with tokens ranked in the top 200 by market capitalization experiencing mixed movements. Leading the gainers, Mog Coin (MOG) surged 16.4%, followed by Lido DAO (LIDO) rising 8.2% and UNUS SED LEO (LEO) climbing 6.4%. Conversely, ORDI (ORDI) led the losers with a 14% drop, alongside Echelon Prime (PRIME) down 11.8% and Uniswap falling 11.7%.
The total cryptocurrency market capitalization stands at $2.21 trillion, with Bitcoin holding a 53.2% market share.
Expectations regarding the impact of Mt. Gox’s sell-off have been revised downward. After a decade-long restitution process following the 2014 hacking incident, which saw over 127,000 accounts compromised and over 940,000 BTC stolen, the exchange declared bankruptcy. In May of this year, the transfer of 141,686 BTC (worth $9.62 billion) to the new wallet “1Jbez” caused market stir and brief panic. Some insiders warned of imminent massive sell-offs as it marked the first movement of Mt. Gox-related cold wallet funds in over five years.
The trustee, Nobuaki Kobayashi, emphasized the additional time and due diligence invested in ensuring safe and reliable repayments to creditors, including technical remedies for secure restitution, compliance with international financial regulations, and discussions with cryptocurrency exchanges on repayment arrangements.
While some experts suggest that the selling pressure from Mt. Gox may be less than anticipated, analysts and early cryptocurrency investors caution that further delays in repayments could occur despite the trustee’s recent announcement.
Cryptocurrency trader Pat notes that FUD (fear, uncertainty, and doubt) related to Mt. Gox and subsequent retracements are not unprecedented in the crypto market. Each of the three previous headlines involving Mt. Gox led to similar retractions but ultimately resulted in Bitcoin’s upward trajectory.
Analysts from Bitfinex indicate that the cryptocurrency market is currently in an uncertain state, with various timeframes showing downward trends amidst outflows from U.S.-listed Bitcoin ETFs exacerbating negative sentiment.
Off the Chain Capital CEO Brian Dixon advises cryptocurrency investors to exercise patience, suggesting that the latest downturn may self-correct as historical data indicates periodic corrections even during bullish markets.
Author: Mary Liu, BitpushNews