THE Bitcoin Price Bitcoin’s stock price plunged this week, falling below $55,000 for the first time since February, as the now-defunct Mt. Gox exchange began distributing billions of dollars in funds it owed.
Mt Gox Announced It has begun paying off its creditors, ending years of waiting following its collapse in 2014. The Japan-based exchange will distribute about $9 billion worth of Bitcoin, Bitcoin Cash and fiat currency.
The news added significant selling pressure to bitcoin, which fell more than 6% on Friday to trade near $54,000. The broader bitcoin and cryptocurrency market lost more than $170 billion in 24 hours due to the declines.
Thursday evening, Mount Gox moved about 47,000 Bitcoins worth nearly $2.7 billion from cold storage wallets to a separate addressAlthough intentions remain uncertain, the transfer has fueled concerns that creditors could sell off parts of the recovered coins.
The payments come after a lengthy bankruptcy process for Mt Gox, which suffered a massive hack in 2014 that resulted in the loss of 850,000 bitcoins. At the time, it was the largest cryptocurrency exchange, handling 70% of all bitcoin transactions.
The creditor payout marks a significant step toward resolving Mt. Gox’s decade-long insolvency case. However, the influx of previously lost coins threatens to alter the dynamics of supply and demand.
Some analysts believe that the selling pressure from payments could push Bitcoin’s price down to $50,000 in the short term. Ongoing transfers from the German Government also weighed on the market.
Others, however, believe that these amounts represent only a small fraction of Bitcoin’s daily trading volumes. They say that most creditors are long-term investors unlikely to sell their holdings en masse, limiting the impact.
Still, analysts widely expect significant volatility between Mt Gox’s distributions and the start of German government sales in July.
