Mt. Gox announces it will begin repaying creditors
Recently, the crypto market and the surging Taiwan stock market can be said to be in two different situations. The crypto market is gloomy and the price of Bitcoin has been falling continuously. Not only has it fallen below the US$60,000 mark, it has even further hit a low of less than US$55,000, triggering market concerns. .
Bitcoin has been in a downward trend since June. According to data from CoinMarketCap, as of the time of publication, Bitcoin fell 5% in the past 24 hours to $55,522, and the decline in the past seven days has reached 9.39%.
This decline in Bitcoin is likely related to the announcement by Bitcoin exchange Mt. Gox that it will begin to repay creditors.
According to Charles Edwards, the founder of Bitcoin hedge fund Capriole Investments, he mentioned in a post on social media Ready to pay back the money.
Why is Bitcoin falling?
Mt.Gox will begin repayments
Mt.Gox is a Bitcoin exchange founded in Shibuya District, Tokyo, Japan in 2010. It once became the world's largest Bitcoin exchange, responsible for more than 70% of the world's Bitcoin transactions.
However, in February 2014, Mt. Gox was hit by hackers who stole a huge amount of Bitcoins, and its operations were affected. Finally, it filed for bankruptcy protection in Japan on February 24, 2014, and Mt. Gox also owed 127,000. Creditors hold over $9 billion in Bitcoin.
By the way, the price of Bitcoin that year was less than $1,000.
For more than a decade, these victims have been waiting for compensation from Mt. Gox. Mt.Gox finally announced on June 24 this year that it would repay creditors in the form of Bitcoin (BTC) and Bitcoin Cash (BCH) starting in July.
But wouldn’t receiving compensation be a good thing for investors? Why does it affect the decline of Bitcoin and cryptocurrency markets?
Analysts believe that these creditors have been waiting for more than 10 years to finally get their money back, so many investors may choose to cash out these profits that have not been used for a decade. Simply put, when investors sell their cryptocurrencies to cash out, a large amount of Bitcoin is released into the market, which in turn creates huge selling pressure on the market and increases the selling pressure.
The German government sold about 10,000 BTC in half a month
In addition, the German police seized 50,000 Bitcoins (worth $2.17 billion at the time) at the beginning of this year, and one of the suspects voluntarily transferred the Bitcoins to the Federal Criminal Police Office (BKA).
In June this year, these Bitcoins began to be transferred and sold, with a total of about 9,600 Bitcoins sold.
Recently, the German government transferred 1,300 Bitcoins to cryptocurrency exchanges Kraken and Coinbase, and 1,700 Bitcoins to anonymous wallets.
Miguel More, CEO of on-chain data tracking platform Arkham, said transfers from wallets to exchanges could represent an intention to sell tokens.
Facing the upcoming large-scale selling pressure, it also casts a shadow on the confidence of the cryptocurrency market in the future.
References: cointelegraph, coindesk
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