Bitcoin, Ethereum rebound withdraws due to concerns about BTC dump from Mt. Gox, Celsius

Cryptocurrency prices withdrew from a strong upswing last week as concerns grew over a flood of Bitcoin from potentially two major dumping of the cryptocurrency in the market.

Bitcoin, the world’s largest cryptocurrency by market value, fell 3.9% in the last 24 hours to $ 20,447.52 in evening trading in Asia, according to CoinMarketCap. Ethereum, the world’s second largest crypto by market value, traded at $ 1,144.15, down 3.8% over the same period.

The two cryptocurrencies fell 8.4% and 9.4% since Friday in late-night trading in Asia, weighing in at 18% and 13% last week.

The measures come amid speculation that two major dumping of cryptocurrencies from the trustee to the bankrupt crypto exchange Mt. Gox Co., Ltd. (Mt. Gox) and from the difficult crypto lender Celsius Network LLC would turn an already filled market.

Mt. Gox, once the world’s largest crypto exchange and processing an estimated 70% of all Bitcoin transactions into 2014, declined after realizing that it had been hacked for 850,000 Bitcoin worth around $ 500 million at the time. The company’s Rehabilitation Trustee, Nobuaki Kobayashi, contacted creditors via email last week, saying that customers and creditors would receive 137,000 Bitcoin, worth about $ 2.8 billion at current prices.

read more: Mt. Gox can return Bitcoin worth over $ 6 billion, says Karpeles

“The worst case scenario will be a majority of the people who decide to sell Bitcoin,” said Blake Cassidy, CEO of the crypto-trading platform Bamboo, Reject in an interview. “Obviously this will not happen all at once, but as a result there will be a price pressure down in the order books on stock exchanges.”

Meanwhile, a large wallet known for having links to the Celsius Network is said to have paid $ 41.2 million in debt to Maker, one of the world’s largest decentralized financial platforms (DeFi).

Data on the chain showed that almost 22,000 wBTCs, worth around $ 449 million at current prices, have already been transferred to an account on FTX, a cryptocurrency exchange operated by FTX Trading Ltd., which raises concerns that another dump may be on road.

“If [any liquidations] happens on the chain through a decentralized platform, the damage would be much worse because market orders would be executed to liquidate the loans, to margin call them, Cassidy said. “It could lead to a liquidity run.”

However, Ben Caselin, head of research at AAX, said Reject much of the concern over Mt. Gox is excessive.

“The worst case scenario is that this will be a media event instead of an actual market event [or] a liquidity event, “said Caselin,” and we are all beginning to get scared and worried. ”

Each recipient of Mt. The Gox revenue will have different options available to them, Caselin said. It is highly unlikely for all Mt. Gox’s creditors to move in unison – certainly not enough to have a significant impact on the market, he added.

Bitcoin traded for about $ 550 when Mt. Gox filed for bankruptcy, which would mean a tidy profit for anyone who wants to withdraw money right away.

However, it is equally likely that these early users have reinvested in the intervening years and developed a “HODL” mentality, Caselin said, referring to a widely used term for remaining invested in crypto in the long run.

“It’s a good thing that people who have been wronged so many years ago and saw their money disappear are able to make amends,” Caselin said. – We should celebrate that.

The flipping

The large supply of Bitcoins in the market combined with the long-awaited Ethereum merger in August has given rise to speculation about “Flippening”, an industry term that refers to the hypothetical moment when Ethereum takes over Bitcoin to become the world’s largest cryptocurrency by market value.

Caselin remained skeptical, saying there was nothing to say about the impact of the transition to Ethereum 2.0 in advance, amid a strong correlation between the two cryptocurrencies. “It’s extremely naive to think that if Bitcoin goes through a massive crash, Ethereum will somehow thrive,” Caselin said. Reject.

Not much has flourished in the crypto industry as the total market value tracked by CoinMarketCap was down 3.3% over the last 24-hour period to $ 912.59 billion in late-night trading in Asia. The market value is down more than 58% from the beginning of the year.

“I think overall, the worst is over,” Cassidy said, “if you have a price reduction from here, it would not be as severe as it has been in recent months.”