The price of Bitcoin took a major dive after the infamous Mt. Gox exchange transferred a staggering $5.1 billion worth of Bitcoin to a new wallet. The leading cryptocurrency’s value plunged by nearly 4.6% on May 27th, crashing from its peak of $70,601 on the Bitstamp exchange earlier that day.
This dramatic price drop has analysts speculating on the potential sell-off of the transferred Bitcoin. Alex Thorn, head researcher at Galaxy Digital, predicts that while most Bitcoin will likely be held onto, there could be strong selling pressure for Bitcoin Cash.
Thorn states that they consolidated these transferred assets before eventually paying them out to creditors of the Mt. Gox collapse in 2014. However, he clarifies that these recent transfers do not necessarily mean immediate repayments.
Thorn notes that many creditors previously refused offers to sell their claims on the funds owed to them. He adds, “Lots of speculation here on my part, no doubt. Even a small percentage of it selling could move the market also.”
$5.1B Bitcoin Distribution Set To Impact Market
The Mt. Gox creditors have been fighting for a decade to recover their funds from the disastrous exchange hack and collapse in 2014. Market analysts view the eventual distribution of these reclaimed funds as a bearish force that could further drive down Bitcoin’s price.
While the extraordinary $5.1 billion Bitcoin transfer sparked the initial price plummet, the future selling behaviour of the Mt. Gox creditors looks to be a key factor in Bitcoin’s price trajectory. Analysts urge caution, as selling even a small portion of those holdings could significantly impact the volatile cryptocurrency market.
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