Bitcoin Price Falls Further as Crypto Liquidations Top $330 Million
Bitcoin's price has plummeted below $60,000 for the first time since early May, sparking concerns in the cryptocurrency market. This drop comes following the announcement that Mt. Gox creditors will begin receiving repayments in Bitcoin and Bitcoin Cash next week. The leading cryptocurrency had been experiencing a cooling off period throughout the month after a strong start to the year, particularly with the SEC's approval of spot Bitcoin ETFs. However, the recent decline has been significant, with a 6.2% drop in the past 24 hours to a daily low of $59,962, as reported by CoinGecko. On Coinbase, the price dipped even further, reaching as low as $59,780.
Mt. Gox, a now-defunct Japanese cryptocurrency exchange, was hacked in 2014, resulting in the loss of $63.6 million worth of Bitcoin at the time. This loss is equivalent to approximately $46 billion at the current Bitcoin price. A decade later, the Rehabilitation Trustee Nobuaki Kobayashi announced that creditors would begin receiving payments in Bitcoin and Bitcoin Cash from early July. This development raised concerns among investors that Mt. Gox creditors might sell off their reclaimed coins, potentially causing a large amount of capital to exit the market.
According to Spot on Chain, the three wallets controlled by Mt. Gox hold a total of 141,686 BTC, valued at around $8.71 billion. If these assets were to be sold off, it could lead to a significant outflow of capital comparable to the inflow seen in U.S. Bitcoin ETFs following their approval in January. In the past two weeks, over $1.2 billion worth of assets has been withdrawn from U.S. Bitcoin ETFs, with investor sentiment showing a lack of confidence in potential interest rate cuts by the FED this year, according to reports from CoinShares.
The market downturn has also seen a significant amount of crypto positions liquidated, totaling over $335 million in the last 24 hours. This includes $293 million from long positions, indicating bets on price increases for specific assets. Bitcoin has been the most affected, with $145 million in liquidated positions, with over $134 million of those from long positions.
Overall, the recent market volatility and liquidations reflect a period of uncertainty and caution among investors in the cryptocurrency space. The impact of Mt. Gox's repayments and the broader market sentiment will continue to influence Bitcoin's price and the overall stability of the crypto market in the coming weeks. The key is to remain vigilant and informed amidst the fluctuations in the market to make informed decisions regarding cryptocurrency investments.
