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Mt. Gox Starts Repaying Creditors, Will Bitcoin Drop Further?
The long-awaited Mt. Gox refunds have finally begun, creating a stir in the cryptocurrency market. Notably, the price of Bitcoin has dropped below $54,000 as Mt. Gox transfers another 3,000 BTC, raising fears of further declines.
Notably, this move is part of the exchange’s effort to repay its creditors, which it has been waiting for since the 2014 crash. As repayments begin, the market remains on edge, anticipating how the beneficiaries will handle their new assets.
Mt. Gox Begins Repaying Creditors, Triggering Market Concerns
Recent Mt. Gox Bitcoin transfers are substantial, with the latest transfer of approximately 2,702 BTC to new addresses. Specifically, 1,157.1 BTC, worth $63.57 million, was moved to a new address “bc1qkj…ug68h” and 1,544.67 BTC, worth $84.87 million, was moved to Bit Bank.
Earlier today, an even larger sum of 47,229 BTC, valued at $2.7 billion, was transferred to a new wallet. These actions are consistent with Mount Gox
plans to begin repaying creditors in July.
Meanwhile, this latest round of transfers echoes similar moves in May, when large sums were sent to new wallets, raising questions about Mt. Gox’s intentions. However, Mt. Gox confirmed its refund strategy today, allaying some market fears but also leading to increased volatility.
Source: Mt. Gox
With Bitcoin already struggling below the $54,000 mark, such large transfers are causing anxiety among investors. Furthermore, the timing of these movements coincides with the start of repayments to creditors, as confirmed by a note from Mt. Gox.
The exchange’s rehabilitation trustee, Nobuaki Kobayashi, said that refunds are being made in Bitcoin and Bitcoin Cash. The process involves multiple conditions, including validating accounts and agreements with cryptocurrency exchangesKobayashi assured that refunds will continue as long as they are done in a safe and secure manner.
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What does the future hold for BTC in this time of market FUD?
The start of Mt. Gox redemptions has led to a mixed reaction in the market. Some investors are concerned about a potential sell-off, which could exacerbate the current price decline. In other words, the broader cryptocurrency market slump, compounded by the anticipation of further Bitcoin sell-offs, has dampened sentiment.
However, some industry experts remain optimistic about Bitcoin’s long-term prospects. Nischal Shetty, CEO of WazirX, has outperformed the market FUDsuggesting that the impact may not be as severe as feared. He stressed that the refunds are being made in BTC and BCH, meaning there will not be a mass sell-off by a single entity.
Shetty noted, “The people receiving these assets are Bitcoin OGs who may sell some of them for liquidity but probably won’t flood the market. Think of it as a massive Bitcoin airdrop campaign.”
The repayment of approximately 142,000 BTC and 143,000 BCH, worth approximately $9 billion, to approximately 127,000 creditors is significant. Given the value of these assets, many recipients may choose to hold them rather than immediately sell them. Furthermore, the value of Bitcoin held by creditors has increased since The Mount Gox Hack in 2014, potentially making them more likely to hold onto their assets for the long term, Shetty added.
However, recent market analysis signals a further decline in BTC price. According to Ali Martinez, Bitcoin’s drop below $57,000 confirms its next support at $51,000. Previously, 10X Research also said that Bitcoin is at risk of falling to $50,000 or even lower, sparking market concerns.
Source: Ali Martinez, X
At the time of writing, Bitcoin Price fell by about 8% but remained above the $54,300 level. In the last 24 hours, the cryptocurrency touched a low of $53,717.38. Furthermore, its trading volume increased by 52% in the last 24 hours to $52.18 billion.