Markets
Will the Cryptocurrency Market Face a Massive Sell-Off?
Mt. Gox Transfers $2.7 Billion in $BTC to a new wallet! The move, involving $47,229 BTC, is part of preparations for creditor repayments, with test transactions to ensure a smooth process. Analysts are speculating on the market impact. Bitcoin’s price temporarily fell below $58,000 as the double whammy of the German government’s wallet sale and the start of Mt Gox repayments caused market volatility.
But will this bring down BTC and the market in general?
And began….
On July 4, 2024, defunct cryptocurrency exchange Mt Gox executed a substantial transfer of approximately 47,229 BTC, valued at around $2.71 billion, from its cold storage to a new wallet address. Data from Arkham Intelligence shows this transactionheld at 00:30 UTC on July 5, is part of the preparations for the exchange’s upcoming $9 billion payment to creditors.
Earlier that day, Mt Gox made several smaller bitcoin transactions, with the largest totaling just $24 worth of BTC. The exchange, which collapsed in 2014 following a major security breach that resulted in the loss of around 850,000 BTC, announced in late June that it would begin distributing funds to creditors in early July.
What will happen to BTC price after Mt. Gox refunds?
Although it is too early to analyze the real impact of cryptocurrency, however, unlike the German government news, this refund has been planned for a long time. There has been a lot of confusion about how much people will receive, with Reuters and BBC wrongly estimating that traders will receive a small fraction of their original BTC.
Holders on Reddit confirmed that while they would not recover the full amount lost, the refunds would still be considerable and worth much more than they were at the time of the hack. This creates the potential for a lot of selling pressure.
Expert insight into market impact
According to Mt. Gox administrator Nobuaki Kobayashi, the necessary steps to initiate these refunds have been completed. This significant payment is expected to introduce notable selling pressure into the market, as indicated by BTC Markets cryptocurrency analyst Rachael Lucas.
Despite some concerns from market commentators about a potential mass liquidation, other analysts suggest that the actual amount of Bitcoin likely to be sold could be closer to $4.5 billion.
Current Market Overview
Bitcoin Price felt the market pressure shortly after the news broke, with the cryptocurrency currently trading at around $56,994. This marks a 5.54% decline in the last 24 hours and an 18.7% drop in the last 30 days.
In a subsequent update, Arkham Intelligence reported that the new wallet address sent 2,702 BTC ($154.7 million) back to Mt Gox cold storage and transferred 44,527 BTC to another address starting with “16ArP.”
Read more about it: Mt. Gox is poised to deliver 9900% ROI