The price of the flagship cryptocurrency Bitcoin (BTC) dropped after testing the $65,000 mark shortly after large outflows were detected from wallets associated with the defunct cryptocurrency exchange Mt. Gox, which is set to distribute over $8 billion to creditors.
The cryptocurrency exchange, which was at one point the largest Bitcoin trading platform, was hacked in 2011 and ultimately filed for bankruptcy in 2014. The recent transaction reignited anxieties surrounding a potential sell-off by creditors who are in line to receive a portion of the $8 billion Bitcoin hoard Mt. Gox has held since its 2014 bankruptcy.
According to on-chain analytics firm Arkham Intelligence, around $5.8 billion worth of BTC left Mt. Gox wallets to new addresses, potentially before the funds are redistributed to creditors.
TODAY: $5.8B MT. GOX BTC ON THE MOVE.Mt. Gox wallets moved a total of 91,755 BTC ($5.8B) this morning to new addresses. pic.twitter.com/BEAmk6E70b
— Arkham (@ArkhamIntel) July 16, 2024
As the Mt. Gox bankruptcy process nears its conclusion, the court-appointed trustee has indicated that creditors can expect initial lump-sum payouts by the end of October. It’s currently unclear whether these creditors will hold onto their tokens, or sell them on the market.
Despite the fears of a potential sell-off Arthur Hayes, co-founder of popular cryptocurrency derivatives trading platform BitMEX, has recently revealed a theory on the exchange rate between the U.S. dollar and the Japanese yen, and how a weakening yen could see Bitcoin’s price top the $1 million mark.
Hayes suggested a scenario in which the Federal Reserve intervenes by printing U.S. dollars and exchanging them for yen, to provide the Bank of Japan with resources to stabilize the currency market while allowing China to continue its monetary expansion.
Such a strategy, he said, could lead to the devaluation of the US dollar and that, coupled with Bitcoin’s rise, could threaten the dollar’s status as the world’s reserve currency. If the theory holds, then institutional investors will move to spot Bitcoin exchange-traded funds (ETFs) as a hedge against the decline of traditional fiat currencies.
Featured image via Unsplash.
