Bitcoin has fallen below $60,000 twice since last night. Capriole Fund founder speculates that the cause of the drop may be due to the repayment of Mt. Gox…
(Previous situation:
140,000 Bitcoins hit the market? Ten questions to clarify the Mt. Gox repayment fog
)
(Background:
Don’t panic! Galaxy: Three reasons why Mt. Gox’s BTC dumping will be less than expected, Bitcoin returns to $60,000
)
Table of Contents
The entire network exploded in the past 24 hours, losing $220 million
What caused the market to crash?
Mt. Gox is expected to begin repayments in July
Analysts believe that Mt.Gox’s dumping impact is controllable
The market had expected Bitcoin to rebound in July, but the market’s optimism was dampened yesterday. BTC hit $59,570 around 6 p.m. yesterday, although it briefly rose above $60,000 again, but it further plummeted to a low of $59,375 early this morning.
At the time of writing, it has returned to $60,327, a 3.12% drop in nearly 24 hours. 10:00 update: Bitcoin fell to $57,800, the lowest in nearly two months.
Bitcoin trend. Image source: OKX spot
Under the repeated washout of Bitcoin, Coinglass data shows that the entire cryptocurrency network has exploded by more than $220 million in the past 24 hours (with long positions accounting for $200 million), with nearly 90,000 people being liquidated.
What caused the market to crash?
Regarding the plunge below $60,000 yesterday evening, Capriole Fund founder Charles Edwards made a post on X in the evening, quoting on-chain changes of Bitcoin, speculating that the main reason for this drop is likely due to the fact that the exchange Mt. Gox has started to repay Bitcoin to creditors, triggering market dumping:
Mt. Gox is expected to start repayments in July
Once the world’s largest Bitcoin exchange, Mt. Gox was hacked in 2014, with 850,000 Bitcoins stolen. After 10 years of bankruptcy litigation and several delays, compensation is finally being paid. It is expected that by October of this year, Mt. Gox will pay 142,000 BTC and 143,000 BCH to creditors.
However, Galaxy’s research director Alex Thorn commented on X platform at the end of June, saying that the Bitcoin dumping caused by Mt.Gox is expected to be smaller than expected. He explained that as nearly 75% of creditors chose early payout (accepting a 10% devaluation), only about 95,000 Bitcoins will be used for early compensation (the remaining BTC will take longer to pay):
Of these, about 20,000 tokens belong to the claim fund
10,000 tokens belong to Bitcoinica BK
There are still about 65,000 tokens owed to individual creditors
He also expects that individual creditors will be more determined to hold Bitcoin than the market expects:
Creditors are mainly long-term holders of Bitcoin. They are tech-savvy early adopters.
Individual creditors have rejected attractive offers from the claim fund for years, indicating that they want their Bitcoin back, rather than compensation in US dollars.
The impact of capital gains tax from selling will be significant. With the price rising, even if only 15% of the physical claims are recovered, the claim holders have increased the value of their recovered Bitcoin by 140 times (in US dollars) since the bankruptcy.
In conclusion, he believes that Bitcoin’s selling pressure will not be as great as investors imagine. However, due to its low liquidity, BCH may experience more severe declines.
However, according to the on-chain data monitoring platform Arkham data, the Bitcoin in the Mt. Gox wallet has not yet moved, so it remains to be seen whether Mt. Gox has started repayments, as Edwards claims (but it is not ruled out that on-chain data has not been updated).
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