Bitcoin
Mt. Gox About to Unload $9 Billion in Bitcoin — What This Means for BTC
- In just a few days, bankrupt Tokyo-based bitcoin exchange Mt. Gox will begin paying out approximately $9 billion in tokens to thousands of users.
- The payment comes more than 10 years after the platform went bankrupt following a series of heists that cost the exchange up to 950,000 bitcoins.
- While this is good news for victims of the hack who have spent years waiting to be compensated, the price of bitcoin has fallen to $59,000, in the second-worst weekly decline of the year for the cryptocurrency market.
Omer Taha Cetin | Anadolu | Getty Images
A bitcoin The exchange that collapsed 10 years ago after being hacked is set to return billions of dollars in tokens to users — and that has investors worried.
In a few days, bankrupt Tokyo-based bitcoin exchange Mt. Gox will begin paying back nearly $9 billion in tokens to thousands of users. The platform went bankrupt in 2014 after a series of robberies which cost in the range of 650,000 for 950,000 bitcoins, or more than $59 billion at current prices.
The payment comes after a lengthy bankruptcy process that involved numerous delays and legal challenges.
On Monday, the court-appointed trustee overseeing the exchange’s bankruptcy proceedings he said Distributions to the company’s roughly 20,000 creditors would begin in early July. Disbursements would be in a mix of bitcoin and bitcoin cash, an early offshoot of the original cryptocurrency.
While this is good news for victims of the hack who have spent years waiting to be cured, Bitcoin price dropped to $59,000 last week in the cryptocurrency market second worst weekly decline Of the year.
CNBC spoke to half a dozen analysts to get their take on what to expect when about 141,000 bitcoins — or roughly 0.7% of the total 19.7 million bitcoins in circulation — are returned to Mt. Gox victims this week.
Mt. Gox — short for “Magic: The Gathering Online Exchange” — was once the world’s largest spot bitcoin exchange, claiming to handle around 80% of all global dollar-denominated bitcoin trades.
When it closed in February 2014, bitcoin was worth around $600.
As of Monday, the world’s largest cryptocurrency was trading at around $62,000 per coin. That means users who opted to be refunded in kind — that is, in the cryptocurrency itself, rather than the cash equivalent — have seen the value of their coins increase by more than 10,000% over the past decade.
John Glover, chief investment officer at cryptocurrency lending firm Ledn, told CNBC that the windfall for Mt. Gox users would likely translate into large bitcoin selloffs as investors look to lock in gains.
“Many will clearly cash out and take advantage of the fact that having their assets trapped in the Mt. Gox bankruptcy was the best investment they ever made,” said Glover, who was previously a managing director at Barclays. “Some will clearly choose to take the money and run,” Glover added.
James Butterfill, head of research at CoinShares, told CNBC that the nearly $9 billion in bitcoins that will be released “has long been a concern for those with bullish views on bitcoin.”
“Consequently, the market is highly sensitive to any related news. With the announcement that the Trust will begin selling in July, investors are understandably concerned,” Butterfill said.
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It wouldn’t be the first time bitcoin has moved in reaction to large redemptions of funds locked in centralized trading platforms.
Last month, cryptocurrency exchange Gemini returned more than $2 billion worth of bitcoin to users with funds that were stuck in its Earn lending program, marking a 230% recovery after bitcoin prices more than tripled since Gemini suspended Earn withdrawals on Nov. 16.
Analysts at JPMorgan attributed this to negative price action, saying in a research note last week that “it is fair to assume that some of Gemini’s lenders, which are primarily retail clients, have taken at least partial profits in recent weeks.”
Analysts expect Mt. Gox customers to be similarly inclined to sell some of their bitcoins to cash in on the cryptocurrency’s seismic gains.
“Assuming most of the liquidations of Mt. Gox creditors occur in July, [this] creates a trajectory where cryptocurrency prices come under more pressure in July but start to recover from August onwards,” they wrote.
Separately, last month, the German government sold 5,000 — valued at roughly $310 million, as of Monday’s prices — of a pile of 50,000 bitcoins seized in connection with the Movi2k movie piracy operation.
The funds were sent to several cryptocurrency exchanges, including Coinbase, Kraken and Bitstamp, according to blockchain intelligence company Arkham Intelligence.
Analysts say these cryptocurrency sell-offs have also put pressure on the price of bitcoin.
Most analysts agree that bitcoin losses are likely to be contained and short-lived.
“I believe concerns about the Mt. Gox selloff are likely to be short-term,” said Lennix Lai, chief commercial officer at cryptocurrency exchange OKX.
“Many of the early adopters of Mt. Gox, as well as lenders, are long-time bitcoin enthusiasts who are less likely to sell all their bitcoins immediately,” he said, adding that previous sales by law enforcement agencies, including the case of the Silk Roaddid not result in a catastrophic and sustained fall in prices.
Butterfill suggested there is enough market liquidity to cushion the impact of any potential mass selling action.
“Bitcoin has maintained a daily trading volume of $8.74 billion on reputable exchanges this year, suggesting that liquidity is sufficient to absorb these selloffs during the summer months,” Butterfill said.
According to CCData research analyst Jacob Joseph, markets are more than capable of absorbing the selling pressure.
“In addition, a healthy portion of creditors will likely accept a 10% haircut on their assets to get paid early, and not all assets will be liquidated in the open market, reducing overall selling pressure,” he said.
Recent price movements suggest the temporary impact of Mt. Gox refunds may already be priced in, Joseph added.
Galaxy Digital’s head of research Alex Thorn believes that fewer coins will be distributed than people think, meaning there will be less selling pressure than the market expects.
However, he also wrote in May that even if only 10% of the distributed bitcoin is sold, “it will have an impact on the market.”
“Most individual lenders will deposit their coins directly into a trading account on an exchange, which makes them extremely easy to sell,” Thorn said.
Vijay Ayyar, head of consumer growth for Asia-Pacific at cryptocurrency exchange Gemini, said the overall impact of the Mt. Gox disbursement is likely to be “dissipated” as the recipients of the funds are varied.
On the one hand, there are individual holders who will receive their bitcoins immediately. Then there is the “significant amount” of bitcoins that will be disbursed to claims funds, Ayyar said.
“These funds would then need to distribute them to their LPs [limited partners]so the whole process can take some time, adding a time element to the price impact,” he told CNBC.
It is worth noting that there are many other reasons behind bitcoin’s recent declines.
The cryptocurrency made an impressive recovery earlier this year, rising above $70,000 shortly after the approval of the first spot bitcoin ETF by the US Securities and Exchange Commission.
See the chart…
Bitcoin price performance in US dollars, year-to-date.
But investors remained anxious amid outflows from bitcoin ETFs and sizable market sell-offs. The broader macro environment also left investors worried.
Earlier this month, the Federal Reserve suggested it plans to cut rates just once this year, down from the multiple reductions it previously indicated.
Cryptocurrencies, which are inherently volatile, are particularly sensitive to changes in the interest rate environment.
CoinShares’ Butterfill said the Fed’s new rate forecast was among “the likely culprits for the recent price decline” of bitcoin.
That, along with other issues, “will likely weigh on prices in the lower-volume summer months,” Butterfill said. However, “the fundamental investment case remains very much intact,” he added.
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Bitcoin (BTC) Mining stocks like Riot Platforms (RIOT), Marathon Digital (MARA) and CleanSpark (CLSK) retreated in pre-market trading as BTC retreated.
RIOT, MARA and CLSK all fell more than 2%, while other crypto-related stocks such as MicroStrategy (MSTR) and Coinbase (COIN) fell 1.5%.
Bitcoin sell-off continues
Crypto-linked stocks retreated as Bitcoin resumed its downtrend on Wednesday. After rising to $63,750 on Monday, BTC is hovering at $60,0000 and it is unclear whether it will recover.
More importantly, Bitcoin is dangerously close to the crucial support at $58,273, which is the 200-day Exponential Moving Average (EMA). The next support level for Bitcoin is $56,426, representing its lowest level in May.
Bitcoin Price Chart
If Bitcoin drops below this price, it will be a sign that the bears have prevailed, which could take it to the $50,000 level, if not below.
This decline happened after a whale deposited nearly 2,000 Bitcoins to Binance in two separate transactions. While this isn’t always the case, deposits to exchanges often happen when holders are exiting their positions.
The whales’ action coincided with a period in which the German government continues to sell off its Bitcoin holdings. It transferred $52 million worth of coins to exchanges on Tuesday.
As a result, data from CoinGlass shows that the volume of Bitcoin balances on exchanges has started to increase. The volume rose to 2.49 million on Tuesday, from last month’s low of 2.47 million.
Bitcoin balances on exchanges
Bitcoin Mining Companies at Risk
If the Bitcoin sell-off continues, it will put Bitcoin mining companies like Marathon, CleanSpark, and Riot Platforms at risk. These companies have tended to have a close correlation with Bitcoin in the past.
This drop is happening a few months after the halving event, reducing the amount of Bitcoins that miners receive.
To compensate for this drop, most of these companies have added their mining equipment. CleanSpark has reached a hash rate of 20 EH/swhich helped her mine 445 coins in June after mining 417 coins the previous month. She did this after purchasing 5 mining sites in Georgia.
Digital Marathon mined 590 coins in June, down 40% from the same month in 2023 and flat from May.
Riot Platforms, on the other hand, focused on acquiring Bitfarms, a company that mined 189 coins in June.
U.Today – Amid an ongoing sell-off in the cryptocurrency market, Michael Saylor, a prominent advocate and president of MicroStrategy, made a statement on X (Twitter) that reverberated across the crypto space: “Just Bitcoin.”
This two-word tweet comes as the cryptocurrency market faces significant sell-offs as the price of Bitcoin plummets.
Bitcoin, the largest cryptocurrency by market value, began its decline in Tuesday’s trading session, hitting $63,223 at one point before falling further.
Losses deepened on Wednesday as investors considered remarks from Fed Chair Jerome Powell, with Bitcoin hitting intraday lows of $59,509. At the time of writing, BTC is down 2.85% over the past 24 hours to $60,274.
According to data from CoinGlass, the sell-off has resulted in a significant amount of cryptocurrencies being liquidated in the past 24 hours, totaling over $166 million. However, this has not deterred Saylor’s confidence in Bitcoin, as he reiterates his longing for the crypto asset in his tweet.
Cryptocurrency market crashes
Cryptocurrencies fell on Tuesday after Fed Chairman Jerome Powell said the central bank needs to see more progress on inflation before cutting interest rates, which are now at 5.25%-5.50%. Powell revealed at a monetary symposium in Sintra, Portugal, that the United States is moving closer to a disinflationary path.
“We want to be more confident that inflation is moving sustainably downward toward 2% before we begin the process of tapering or easing policy,” Powell said.
Market losses deepened after Wednesday’s economic releases that indicated the labor market is cooling. Recent data showed weaker-than-expected private payroll growth in June, but weekly jobless claims were higher than economists had forecast. The latest figures come ahead of the highly anticipated June nonfarm payrolls report on Friday.
As the cryptocurrency market goes through a period of uncertainty, the coming days and weeks will be crucial in determining the direction of BTC’s price.
Rumors that the long-awaited Grand Theft Auto 6 will use cryptocurrency that has been circulating for more than a year now—and they’re spinning again.
On Wednesday, a pseudonymous Crypto Twitter influencer named Gordon — apparently named after Gordon Gekko from the iconic 1987 film “Wall Street” —shared to his nearly 500,000 followers that “GTA 6 will allow cryptocurrency payments” and that “so far only Bitcoin, EthereumIt is USDT [are] confirmed.”
But in reality, no cryptocurrency has been confirmed for Grand Theft Auto 6, despite ongoing chatter about the rumors. Rockstar Games and parent company Take-Two have made no such announcements this week on the subject, nor have they made any prior announcements, and official trailers and announcements have made no mention of cryptocurrency being included.
However, the tweet — which also included a fake trailer for the game — quickly went viral, with over 500,000 views as of this writing in a matter of hours. When Twitter users asked Gordon for his sources, he would jokingly respond that his “uncle works there” or say that previous reports on the matter were “old” at this point.
But really, nothing has changed since then. DecipherGG’s reported in previous rumors in May 2023, not even since the first official trailer — which initially leaked with “BUY BTC” stamped on itApparently by the leaker in question—premiered last December.
DecipherGG reached out to Rockstar Games for comment but did not receive an immediate response.
Could Grand Theft Auto 6 implement a crypto element when it releases in 2025? It’s certainly possible, and if so, it would be a transformative moment for cryptocurrency adoption by the traditional gaming industry.
Take-Two Interactive has explored the space before, acquiring casual gaming giant Zynga in early 2022, when Take-Two founder and CEO Strauss Zelnick suggested there were “Web3 opportunities” that they could explore better as a team. Zynga has launched its first blockchain game on Ethereum, called Sugartownbut Take-Two has yet to get involved with other brands.
Rockstar Games, on the other hand, prohibited the use of cryptocurrency or NFTs on player-run Grand Theft Auto 5 servers in late 2022, following a rise in the use of NFTs to represent unique player-owned assets on modded game servers.
And given Grand Theft Auto’s satirical tone, the game may be more likely to criticize cryptocurrency and poke fun at caricatures of crypto fans and NFTs, for example, rather than trying to launch its own on-chain currency. But that’s all speculation at this point, as there are relatively few official details about GTA 6.
For now, at least, don’t believe the hype. While Rockstar Games hasn’t officially closed the door on cryptocurrency usage in Grand Theft Auto 6, it hasn’t confirmed anything about it either. However, it’s sure to remain a hot topic in the long run leading up to release, which is currently scheduled for fall 2025.
Edited by Ryan Ozawa.
Bitcoin
Crypto President Trump’s ‘Lesser’ Regulation Will Bless Coinbase’s Bitcoin Leverage, Expert Says – Coinbase Glb (NASDAQ:COIN)
Chris SenyekChief Investment Strategist at Wolfe Researchrecently expressed his opinion on the potential impact of a Donald Trump win the 2024 elections in the cryptocurrency market.
What happened: Senyek suggested that a Trump presidency could ease cryptocurrency regulations, benefiting companies like Coinbase Global Inc. COIN due to its importance Bitcoin BTC/USD Leverage.
“Trump would be less harsh on crypto regulation, and Coinbase would be a big beneficiary of that given its influence on bitcoin,” Senyek said during CNBC’s “Last Call” on Tuesday.
See too: Enhance Your Retirement Portfolio: The Benefits of Adding Cryptocurrency
Why does this matter?:Senyek’s comments come in the context of the former president Donald Trump‘s reported plans to participate at the Bitcoin 2024 convention, which could reinforce his image as a “Crypto President”.
Trump’s potential participation in the Bitcoin 2024 convention, a major event on the cryptocurrency calendar, could have significant implications for the industry.
Pratik KalaHead of Research in DigitalX Limitedhe has predicted a Trump victory in the upcoming elections, but warns that immediate cryptocurrency-friendly regulations may not be a priority.
A recent report by 10x Search explore the recent rise in Bitcoin price and its potential connection to Trump’s strong position in the 2024 election race. The report, titled “Is the Bitcoin Trump Pump Sustainable?”, highlights a 4% spike in Bitcoin’s price following the news that the president Joe Biden will remain in the race despite a poor performance in the presidential debate.
Price Action: At the time of writing, Bitcoin was trading 2.10% lower at $60,860.66, according to Benzinga Pro.
Read next:
Image created using photos from Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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