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Mt. Gox Bitcoin Payout Fears Wipes Out $170 Billion From Crypto Market

Mt. Gox Bitcoin Payout Fears Wipes Out $170 Billion From Crypto Market

The cryptocurrency market experienced a substantial downturn on Friday, compounding the selling pressure witnessed over the past two weeks. The leading cryptocurrency, Bitcoin (BTC), retraced over 20% from its highs in June and May, dropping as low as $53,500. 

The market decline was largely attributed to the long-awaited trustee overseeing the Mt. Gox bankruptcy, who announced the commencement of Bitcoin and Bitcoin Cash repayments to creditors affected by the infamous hack that resulted in billions in losses. 

As a result, the entire cryptocurrency market shed over $170 billion in combined market capitalization in just 24 hours.

Bitcoin Repayments And German Government Sell-Off

The trustee responsible for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, stated that Bitcoin and Bitcoin Cash repayments had begun through designated crypto exchanges. 

While the amount transferred to these exchanges was not specified, data from market intelligence platform Arkham revealed that 47,229 BTC, valued at $2.71 billion, had been transferred to an unknown address.

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Kobayashi emphasized that the remaining funds would be returned to creditors once “specific conditions” were met, including verifying registered accounts and finalizing discussions with the designated exchanges

The decline in crypto prices led to substantial liquidations in the derivatives markets, with over 229,755 traders experiencing combined liquidations worth $639.58 million in the past 24 hours. Of this amount, $540.46 million represented long trades, indicating positions taken by investors expecting long-term asset appreciation. 

Additionally, the German government contributed to the market pressure by selling approximately 3,000 BTC, equivalent to around $175 million, from a seized stash of 50,000 BTC associated with the movie piracy operation Movie2k. Despite the sell-off, the government still holds over 40,000 BTC, valued at over $2 billion.

What Historical Price Cycles Suggest

Despite the ongoing bloodbath witnessed in crypto prices over the past month, industry insiders and analysts remain optimistic about Bitcoin’s future performance. 

Despite the short-term selling pressure resulting from Mt. Gox repayments, experts anticipate a rebound towards the end of the year. Crypto data and research firm CCData suggested that Bitcoin’s current appreciation cycle has not yet peaked and will likely achieve a new all-time high. 

Historical market…

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