Cryptocurrencies plummeted on Friday 5 July 2024 as digital markets reacted to Mt. Gox’s estimated repayments of close to $9bn. Once the world’s leading Bitcoin exchange, Mt. Gox crumbled in 2014, and those who invested their Bitcoin through this platform have waited a decade for compensation.
Mt. Gox Repayments Hobble Global Crypto Performance
Media reports showed that Bitcoin – the global powerhouse in virtual tokens – was down 3% at one stage and even dipped below $55,000 during Friday trading. This was the first time since the end of February 2024 that Bitcoin has slumped this low.
Ether, another popular cryptocurrency, dropped by approximately 5%. CNBC said that, according to CoinGecko, the entire crypto market lost over $170bn of its market cap in 24 hours.
Nobuaki Kobayashi, the trustee for the Mt. Gox bankrupt estate, confirmed that repayments in Bitcoin and Bitcoin Cash started on Friday. He did not indicate how much has been transferred to the exchanges designated for these repayments, but said that creditors will have to meet certain conditions for payouts.
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Analysts believe that this alleged coin dump will trigger notable selling activity. The crypto price dive had a significant impact on the derivatives markets. CNBC referenced CoinGlass, which suggested that 229,755 traders saw combined positions of $639.58m liquidated. Long trades made up just over $540m of this.
The German government added to the pressure and sold an estimated 3,000 bitcoins on Thursday 4 July 2024, which reportedly came from a stash of 50,000 connected with Movie2k, a movie piracy operation. The industry, however, remains positive and believes that Bitcoin will once again lift its head and achieve new heights.
