Mt Gox Makes First Repayment Bitcoin Price Falls to FourMonth Low

CoinDesk reports:
The cryptocurrency market continues to crash, with investors worried about massive sell-offs from Mt.Gox creditors and the German government.
Total market value dropped below $2.2 trillion for the first time since February, down 21% from the local high of $2.785 trillion four weeks ago.
Data from CoinGecko shows that the price of Bitcoin, after plummeting 8% in less than 12 hours, briefly fell below $54,000, then rebounded slightly to over $55,000. BTC has dropped 23% in the past 30 days.
BTC price. Source: CoinGecko.
After a 10.6% drop in 11 hours, Ethereum hit a low of $2,831, with the last trade at $2,941. ETH’s price has also fallen by about 24% in the past four weeks, although spot Ethereum exchange-traded funds are expected to start trading in the coming weeks.
However, despite the poor performance of Bitcoin and Ethereum, these two assets continue to regain dominance as altcoins suffer heavy losses. Bitcoin currently accounts for 52.85% of the total cryptocurrency market value, while Ethereum’s market value is 17.7%, up from 44.3% and 14.5% respectively since mid-February.
Significant losses for the top 100 altcoins include Arbitrum (ARB), which lost 14.4% in the past 24 hours, Optimism (OP) fell by 13.9%, Notcoin (NOT) dropped by 13.5%, Polkadot (DOT) dropped by 4.2%, and Solana (SOL) experienced a slight 2.5% pullback.
In the past 24 hours, only two of the top 100 cryptocurrencies have seen a counter-trend increase, with MultiversX (EGLD) rising by 6.2% and Fasttoken (FTN) rising by 1.9%.
According to CoinGlass data, leveraged traders suffered $570.5 million in liquidations in the past 24 hours, including $183 million in BTC positions and $137 million in ETH trades.
Cryptocurrency total market value in 2024. Source: CoinGecko.
Mt.Gox transfer triggers sell-off
The bearish trend coincides with Mt.Gox, a defunct pioneering cryptocurrency exchange, making its first repayment to creditors after more than 10 years of stopping withdrawals and filing for bankruptcy.
According to Arkham Intelligence, a wallet belonging to Mt.Gox made a massive bitcoin transfer worth $2.71 billion about 12 hours ago, exacerbating the sharp downturn in the cryptocurrency market. Three hours later, Mt.Gox made another transfer of $148.4 million, followed by a transfer of $84.9 million worth of BTC to the Bitbank cryptocurrency exchange.
On Reddit, user “mikeplus20” posted a message claiming to have been repaid by Mt.Gox through Bitbank. They said, “The BTC/BCC coins are now under my control! The amount I received is exactly the amount shown in the Mt Gox form. I used Bitbank as the exchange.”
On July 5th, a notice was posted on Mt Gox’s website stating that some creditors had been repaid. It added that further repayments would be made once various conditions were met, asking creditors to “wait for a while” – indicating that it may take some time for further distribution to occur.
Strangely, the link to this notice now shows a 404 error, indicating that the announcement has been taken offline.
Is the fear of the Gox mountain exaggerated?
Previously, the trustee for Mt.Gox’s rehabilitation announced on June 24th that the exchange was preparing to start distributing payouts this month.
Despite holding 141,687 bitcoins and bitcoin cash, worth around $8 billion, a report by CoinShares on July 4th estimated that only 75,000 bitcoins and BCH would be paid out in the short term, with the first round of payments specifically for creditors who agreed to receive payments before the civil litigation process in exchange for surrendering 10% of their claims.
However, despite this, analysts attribute the recent string of bearish trends to anxious investors trying to reduce their risk exposure before the repayments. CoinShares estimates that the assets held by creditors have increased in value by 13,600% since Mt.Gox closed in February 2014.
Not everyone, however, believes that Mt.Gox’s issuance is worth the attention.
Luke Nolan, research assistant at CoinShares, said, “For many, this would be a high tax event if they chose to sell immediately.”
Many creditors, including early users and long-term enthusiasts of Bitcoin, are unlikely to sell all their bitcoins immediately, according to OKX Chief Business Officer Lennix Lai, who told the Defiant.
German authorities appear to have sold $483.8 million worth of BTC in 16 days
Large-scale Bitcoin transfers from wallets associated with German authorities have also spooked investors.
On January 30, German police announced that they had seized 50,000 bitcoins (worth $21 billion at the time) from an individual working for Movie2k, a popular website that distributed pirated movies from 2008 to 2013. The person has been in custody since 2019 on suspicion of money laundering and recently agreed to transfer his BTC assets to German authorities while cooperating with the police.
On June 19, a wallet marked by Arkham as belonging to the German government began making large transfers to cryptocurrency exchanges, causing market concerns. So far, the wallet has unloaded 8,774 bitcoins (worth $483.8 million at current prices), including 4,774 bitcoins since early July.
BTC balance history of the German government wallet. Source: Arkham Intelligence.
About four hours ago, the wallet transferred 547,439 bitcoins worth $30 million to market maker Flow Traders.
Lai said, “Referring to previous sales by law enforcement, such as the Silk Road case, which did not lead to sustained catastrophic price declines, suggests that the market often holds enough liquidity to absorb sell-offs.”