Cryptocurrency Market Faces Major Turbulence Amid Mt. Gox Repayments
The cryptocurrency market saw a sharp decline on Friday 5th July as news emerged about the payout of nearly $9 billion to users of the collapsed bitcoin exchange, Mt. Gox. Due to the strong response this information has received from investors, prominent cryptocurrencies have seen significant price declines.
Bitcoin and Ethereum Hit Hard
The price of Bitcoin, the world’s largest cryptocurrency, fell by about 3% to $56,682.90, according to Coin Metrics. Prior to that, it had fallen to a low of $53,513.55, which was its lowest point since late February. Another important cryptocurrency, Ethereum, had a significant decrease as well, dropping about 5% to $2,971.68.
Massive Market Impact
Famous website CoinGecko revealed that within the course of a single day, the total market valuation of cryptocurrencies fell by more than $170 billion. The trustee of Mt. Gox, Nobuaki Kobayashi, was responsible for this enormous upheaval when he declared that creditors would now be receiving payments in bitcoin and bitcoin cash via a number of approved cryptocurrency exchanges. The actual sum of money sent to these exchanges is still unknown.
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Broader Market Pressures
Adding to the market pressure, the German government sold approximately 3,000 bitcoins, worth around $175 million, that were seized in connection with the movie piracy operation Movie2k. Despite this, Germany still possesses more than 40,000 bitcoins, worth over $2 billion.
Future Outlook
Despite the current recession, business insiders are optimistic. Given past market cycles, there is a chance that Bitcoin may experience a sizable increase in price before year’s end, especially if the selling pressure caused by the Mt. Gox repayments lessens. CCData analysts forecast that Bitcoin may hit a new record high and that its value may rise much higher by 2025.
Co-founder of Fundstrat Global Advisors Tom Lee is as bullish, predicting that Bitcoin will reach $150,00. In addition, investors are looking forward to the opening of an ether exchange-traded fund (ETF) in the United States after the first spot Bitcoin ETF was recently approved.
