Defunct cryptocurrency exchange, Mt. Gox has begun the repayment of its creditors as promised in Bitcoin (BTC) and Bitcoin Cash (BCH). The news has sent excitement among customers who have waited ten years for this to happen.
While the excitement grows among receivers, major concerns have spread throughout the entire crypto market regarding the impact of a sell-off on the broader crypto market and not just on the price of Bitcoin. In the last 24 hours, the price of BTC has crashed by more than 5%, trading at the $53k mark at some point before slightly recovering to $54,000. However, prominent crypto analysts have called for calm, stressing that the market can handle a wide sell-off in case it happens.
Mt. Gox Begins First Batch of Payments
In a statement released by the Mt. Gox Rehabilitation Trustee dated July 5, the former Japan-based crypto exchange has resumed repayments of its credits in Bitcoin and Bitcoin cash. Recall that the exchange previously announced that it would start the repayment plan in early July for customers who have met the laid down requirements.
According to the statement, the Rehabilitation Trustee made payments through some of the designated cryptocurrency exchanges. While the exact crypto exchange was not mentioned, it is previous knowledge that the funds will be redistributed through five prominent exchanges including Bitstamp, Bitbank, Bitgo, Kraken, and SBI VC Trade. Additionally, customers who have not yet received repayments are advised to meet the conditions stated in the release to get their funds released to them.
The repayment notice came shortly after Mt. Gox made a transfer of 47,228 BTC, worth $2.71 billion, from its cold storage to a new wallet address. Known previously as one of the top crypto exchanges in the world, Mt. Gox suffered a hack in 2014 that led to the loss of an estimated 740,000 Bitcoin. Before the attack, Mt. Gox reportedly handled more than 70% of the global Bitcoin transactions.
Selling Pressure Concerns
The price of Bitcoin, the largest cryptocurrency by market cap, has been on a downward trend since last week, fueled by the anticipation of the repayments from Mt. Gox. Investors worry that the price of BTC might drop as low as $40k to $45k, hence they begin dumping their holdings to prevent further loss.
These concerns spring from the fact that creditors who receive their repayments might sell their holdings to cash in on realized profits, increasing the Bitcoin selling pressure. Recall that at the time of the Mt. Gox collapse, Bitcoin was trading around $600, which when compared to today’s price, is over 100x gains. Some prominent analysts have called for calm, stating that the market can handle a sell-off in case it happens.
However, the assurance seems not to work out because Bitcoin has continued on its downward path. At the time of writing, Bitcoin is trading at $54,989, representing a 4.35% decrease in the last 24 hours. As the Mt. Gox repayment commences, market participants are closely watching the price movements of the asset and how it affects the global market trend.
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