The world’s largest cryptocurrency has been under pressure recently from news of the collapse of bitcoin exchange Mt. Gox that is preparing to distribute around $9 billion worth of coins to users.
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Cryptocurrencies fell on Friday as investors focused on the payment of nearly $9 billion to users of collapsed bitcoin exchange Mt. Gox.
As of 10:50 a.m. London time, the price of bitcoin fell nearly 6% in 24 hours to hit $54,500.53, marking the first time it has traded below $55,000 since February 27, according to data by CoinGecko.
Rival Ether sank about 9% to $2,872.10.
In total, the entire cryptocurrency market has lost more than $170 billion in combined market capitalization in the past 24 hours, according to CoinGecko data.
On Friday, the trustee for the bankruptcy estate of Mt. Gox CEO Nobuaki Kobayashi said in a statement that it had begun making payments in bitcoin and bitcoin cash to some creditors through a number of certain crypto exchanges.
Trustee of Mt. Gox did not specify how much money was transferred to these exchanges.
He noted that the remaining funds will be returned to creditors after a number of conditions are met, including confirmation of the validity of registered accounts and the conclusion of discussions between the trustee and certain crypto exchanges.
The trustee is still working to ensure payments “can be made safely and securely,” Kobayashi wrote, asking “qualified rehabilitation creditors to wait for a while.”
It comes after a small amount of bitcoin was moved from wallets linked to Mount Gox, according to blockchain analytics firm Arkham Intelligence, with the largest move being a $24 transfer to Japanese crypto exchange Bitbank.
Bitbank is among the recipients listed to support repayments.
Recently, the world’s largest cryptocurrency has been under pressure from news of the collapsed bitcoin exchange Mt. Gox preparing to distribute around $9 billion worth of coins to users.
This coin toss is expected to lead to some significant selling action.
Falling crypto prices led to massive liquidations in derivatives markets, according to crypto data firm Coinglass, which suggests 229,755 traders liquidated their positions worth a combined $639.58 million in the past 24 hours. Of that amount, $540.46 million represented long trades – financial positions taken when an investor expects the price of an asset to rise over the long term.
Also putting pressure on crypto markets, the German government on Thursday sold roughly 3,000 bitcoins — worth about $175 million at today’s prices — out of a 50,000-bitcoin stash seized in connection with the Movie2k movie piracy operation, according to Arkham Intelligence.
Arkham, which is tracking Germany’s bitcoin wallet, noted that the government still holds more than 40,000 bitcoins worth over $2 billion.
Industry insiders still expect bitcoin prices to rise again towards the end of the year, as expected short-term selling pressure from Mt. Gox to grow.
Analysts at crypto data and research firm CCData said in a report on Tuesday that bitcoin had not yet reached the top of the current valuation cycle and was likely to hit a new all-time high.
Historical market “cycles” have shown that the so-called bitcoin “halving” event – which cuts the supply of new bitcoins to the market – has always been preceded by a period of price expansion that can last from 12 to 18 months “before it produces a high cycle”. ”, CCData said in its report.
The last bitcoin halving took place on April 19 of this year, so those timelines haven’t passed yet.
“Furthermore, we have observed a decline in trading activity on centralized exchanges for nearly two months following the halving event in previous cycles, which appears to have mirrored this cycle. This suggests that the current cycle may extend further into 2025,” CCData said.
Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told CNBC’s “Squawk Box” on Monday that he still sees bitcoin reaching $150,000 despite the “overshoot” from the upcoming token disbursement from Mt. Gox to creditors.
“If I were to invest in crypto, knowing that one of the biggest overshoots is going to disappear in July, I would think that’s a reason to expect a pretty sharp rebound in the second half,” Lee said.
Investors are still awaiting the launch of an ether exchange-traded fund in the US, which would follow the approval of the first US bitcoin ETF in January.
In May, the U.S. Securities and Exchange Commission approved a rule change that would pave the way for buy-and-hold ETFs. ether.
VanEck, BlackRock, Bitwise and Galaxy Digital are among the companies looking to launch their own ether ETFs.