Mt. Gox Rumors Panic Bitcoin Twitter As BTC Price Returns Below $20K
Bitcoin (BTC) failed to hold the $20,000 support on August 27 as fears of a sell-off by users of defunct exchange Mt. Gox contributed to the price pressure.
Mt. Gox rumors dismissed as ‘typical crypto’
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it headed towards fresh six-week lows, hitting $19,766 on Bitstamp.
Thin weekend liquidity appeared to exacerbate already jittery markets, which reacted poorly to unconfirmed rumors that Mt. Gox funds were to be released to creditors on August 28.
Claims varied widely at the time of writing, with some suggesting that a tranche of 137,000 BTC was set for release at once. Others said funds would be sent piecemeal, but that payments would still begin this weekend.
One point of consensus came in the form of creditors reportedly wanting to sell BTC owed to them, this has been out of reach since 2014, when BTC/USD traded below $500. The unrealized 40X returns, they feared, would prove too tempting for creditors to become willing hodlers.
Mt. Gox imploded with hundreds of thousands of bitcoins nearly ten years ago. After a lengthy legal proceeding involving funds later recovered from the exchange, the appointed rehabilitation administrator, Nobuaki Kobayashi, announced on July 6 that he was “preparing to pay back” the creditors.
In documentation at the time, Kobayashi gave “the end of August” as a reference period in which some initial payments might begin.
“After discussions with the court and in accordance with the rehabilitation plan, the rehabilitation manager plans to determine the assignment etc. Limitation reference period from approx. the end of August this year until all or part of the repayments that have been made as first installments have been completed per safe and secure repayments,” part of it read.
However, with no new official information appearing on the dedicated website covering the rehabilitation proceedings, it remained unclear why the sale rumors had gained so much traction so quickly.
This is also only for those who choose the early one-time payment, which means they only get a portion of the bitcoin. Those who wait until the end of the civil rehabilitation period will get more that is years from now.
— Danny Devan (@dannydevan) 27 August 2022
For trader and analyst Josh Rager, meanwhile, even if the entire BTC holdings were sold at once, the resulting selling pressure would not create the kind of apocalyptic event some imagined.
The MT GOX release is probably creating more fear than necessary
140k BTC = $2.8B
BTC daily trading volume $20B to $30B
These BTC are not going to be sold all at once https://t.co/ZLBh0HVIgs
— Rager (@Rager) 27 August 2022
“Fears surrounding the release of, potentially, Mt. Gox Bitcoins are simply unwarranted,” Cointelegraph contributor Michaël van de Poppe added.
“Typical crypto.”
Profits are squeezed into the weekend’s volatility
Still, the latest losses triggered more pain for existing BTC hodlers.
Related: US stocks lose $1.25T in one day – more than the entire crypto market cap
In accordance data from chain analytics firm Glassnode, the percentage of total BTC supply in surplus hit a one-month low on the day of just over 55%.
Older coins continued a trend of increasing dormancy in the meantime, with the percentage of supply that last left the wallet two years ago or longer hitting ten-month highs.
Cointelegraph recently reported on hodler habits that remained largely unchanged despite the 2022 crypto market downturn.
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