Investors are closely watching the Bitcoin market as Mt. Gox, the bankrupt Bitcoin exchange, begins to pay nearly $9 billion in compensation to users, causing cryptos to plunge on Friday. According to CoinGecko, as of press time, Bitcoin has fallen nearly 6% in the past 24 hours to $54,500.53, breaking the $55,000 mark for the first time since February 27th. Ethereum, as Bitcoin's main competitor, also fell about 9% to $2,872.10. Overall, the total market value of the entire cryptocurrency market has evaporated by more than $170 billion in the past 24 hours.
It is reported that Nobuaki Kobayashi, the trustee of Mt. Gox's bankruptcy property, announced on Friday in a statement that he has already begun to repay some creditors with Bitcoin and Bitcoin Cash through some designated cryptocurrency exchanges. However, the trustee did not specify how much money was transferred to these exchanges.
Kobayashi pointed out that the remaining funds will be returned to the creditors after a series of conditions are met, including confirming the validity of registered accounts and completing discussions between the trustee and designated cryptocurrency exchanges. He emphasized that the trustee is still working to ensure that debts are repaid "safely and reliably," and urged "eligible rehabilitation creditors to wait for a while."
Blockchain analysis company Arkham Intelligence reported that a small amount of Bitcoin had been transferred out of wallets related to Mt. Gox, with the largest transfer being $24 worth of Bitcoin to the Japanese cryptocurrency exchange Bitbank. Bitbank is one of the beneficiaries supporting repayment. This indicates that Bitcoin was involved in the settlement process between Mt. Gox and its creditors, although the mentioned transfer amount is relatively small.
Mt. Gox's compensation action has put pressure on the world's largest cryptocurrency, and the market expects the behavior of dumping currency in large quantities into the market will lead to further large-scale sell-offs. Cryptocurrency data company Coinglass said that the price plummet caused a large number of liquidations in the derivatives market. In the past 24 hours, the positions of 229,755 traders were liquidated, with a total value of $639.58 million, of which $540.46 million were long trades.
In addition, the German government sold about 3,000 Bitcoin (worth about $175 million at today's prices) out of 50,000 Bitcoin associated with the movie piracy operation Movie2k on Thursday, which also put pressure on the cryptocurrency market. Arkham Intelligence pointed out that the German government still holds over 40,000 Bitcoin, worth over $2 billion.
It is worth mentioning that Friday's decline marked the fourth consecutive trading day of decline for Bitcoin. The downward trend of Bitcoin prices has also affected the stocks of related cryptocurrency companies, which fell in pre-market trading: Marathon Digital (MARA.US) fell 6.3%, CleanSpark (CLSK.US) fell 5.4%, Coinbase Global (COIN.US) fell 6%, Riot Platforms (RIOT.US) fell 5.6%, MicroStrategy (MSTR.US) fell 6.4%, Bitdeer Technologies (BTDR.US) fell 9.2%, and Bit Digital (BTBT.US) fell 7.2%.
This series of declines not only reflects concerns about the potential oversupply caused by Mt. Gox's compensation actions, but also highlights the volatility and sensitivity of the cryptocurrency market, particularly when the behavior of large holders may have a significant impact on prices.
However, despite the pressure, industry insiders still expect Bitcoin prices to rise again before the end of the year once the expected short-term selling pressure caused by Mt. Gox's debt repayment subsides. Analysts at crypto data and research firm CCData said in a report that Bitcoin has not yet reached the top of the current cycle of appreciation and may set a new historical high. CCData pointed out that the historical market "cycles" indicate that Bitcoin's so-called "halving" events always precede a phase of price expansion, which may last for 12 to 18 months, "before a cycle top emerges."
Tom Lee, co-founder and research director of Fundstrat Global Advisors, said in an interview that despite the "unresolved issues" of Mt. Gox's imminent release of tokens to creditors, he still believed that Bitcoin prices would hit $150,000. Lee believes that if one of the largest unresolved issues disappears in July, this will be a reason to expect a fairly strong rebound in the second half of the year.
Meanwhile, investors are still waiting for the United States to launch an Ether exchange-traded fund (ETF) after approving the first Bitcoin spot ETF in January. In May of this year, the US Securities and Exchange Commission approved a rule change paving the way for the purchase and holding of Ether ETFs. Companies like VanEck, BlackRock, Bitwise and Galaxy Digital all hope to launch their own Ether ETFs.