**Mt. Gox Begins Repayments: Market Blames It for Recent Bitcoin Trends, With Further Sell-Offs Possible**
On July 5th, Mt. Gox, once the world’s largest Bitcoin exchange, announced the commencement of its repayment process as part of its bankruptcy proceedings. After suffering a hacker attack in 2014 that resulted in the theft of 850,000 BTC, the exchange has finally begun compensating its creditors after a decade-long legal battle. It is anticipated that Mt. Gox will repay a total of 142,000 BTC and 143,000 BCH to its creditors by October of this year.
The repayment process, which began on July 5th, involves the distribution of compensation through various cryptocurrency exchanges. However, due to differences in the exchanges used by creditors to receive the repayments, the specific timing of these repayments will vary.
The initiation of the repayment process by Mt. Gox, combined with recent large Bitcoin transfers by the German and U.S. governments to exchanges, which appear to be for liquidation purposes, has been identified as a major factor contributing to Bitcoin’s recent downtrend. This week, Bitcoin fell to a low of $53,485, marking its lowest point since February.
According to Arkham monitoring, on July 5th, Mt. Gox transferred 47,229 BTC (worth $2.71 billion) from its cold wallet, including 1,544.7 BTC ($84.9 million) to the Bitbank exchange, and 1,157.1 BTC to an unknown address, which may be another repayment exchange.
**Repayments May Extend into October**
It is important to note that the sell-off due to Mt. Gox’s repayments might not be over yet. Brian Dixon, CEO of Off the Chain Capital and a Mt. Gox creditor, stated that many creditors have yet to receive their compensation, and the repayment phase could last until October.
However, Stephane Ouellette, CEO of FRNT Financial Inc., believes the market might be overreacting to the Mt. Gox repayment event. He suggests that the German government’s liquidation of $2.3 billion worth of Bitcoin could pose a more significant direct threat to the market.
**Further Sell-Offs Ahead?**
Analyst Axel Adler Jr. warned that the current situation might lead to further sell-offs. He pointed out that ordinary investors have achieved 84% unrealized profits on Bitcoin, and if the price approaches the $52,200 average level (PR Bands), it could reduce unrealized profits by about 14%, potentially triggering a sell-off as investors might choose to realize their gains due to fears of further price declines.
Axel Adler Jr. indicated that the critical price level to watch is $46,400, which represents the average buying price of Bitcoin over the past year.
Axel Adler Jr. emphasized that the current focus should be on the $46,400 price level, which has been the average buying price for Bitcoin over the last year.
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