Is the Legacy of Mt. Gox Still Impacting the Price of Bitcoin?
Nobuaki Kobayashi, a Japanese attorney and trustee in the bankruptcy case of Mt. Gox, has stated today that he has sold over $400 million worth of BTC and BCH. Apparently, the sales have been ongoing since September. According to a statement, Kobayashi is selling the digital assets to raise money for creditors who lost out thanks to the early crypto exchange’s insolvency in 2014. The document released earlier also states that he has more BTC and BCH to sell.
Does That Explain Today’s Dip?
According to reports in Bloomberg, Kobayashi has an additional $1.9 billion in tokens left to sell. It is believed that he will consider exchanging them for fiat currency to pay back Mt. Gox creditors in the future.
The case of Mt. Gox caused massive disruption to the cryptocurrency market back in early 2014. According to the official company line, around 850,000 Bitcoins were appropriated from the first major exchange at the hands of hackers. The BTC was worth around $500 million back then. Of course, today they’re worth considerably more.
Following the supposed hack, Mt. Gox filed for bankruptcy protection. They later claimed that they were able to recover around 200,000 BTC but the rest were lost.
The document issued today does not outline how Kobayashi intends to sell the Bitcoin and its derivative, Bitcoin Cash, which did not exist when the funds went missing in the first place. However, he did state that he was trying to get “as high a price as possible”, suggesting that he does not intend to simply dump them on the market.
The news has coincided with a dip in the price of Bitcoin. The most popular digital currency shed around $1,000 off its price in just an hour and a half earlier today. However, based on the length of time that Kobayashi claims to have been selling Mt. Gox’s remaining Bitcoin, it seems unlikely that the abrupt downwards price pressure has been caused by his statement or actions.
A more likely explanation of the drop is the SEC announcement from today. They declared that all cryptocurrency exchanges must be registered with them. A statement from the agency read:
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange’… then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
At the time of writing, the price has returned back above the $10,000 level. Such knee-jerk selloffs in response to any news are common in the space. With so much uncertainty surrounding the future of the emerging asset, the slightest story can panic investors. Similar downwards price pressure occurred after South Korea was simply rumoured to be “cracking down” on cryptocurrency earlier this year. The commotion turned out to be misplaced. The government there were seeking to tackle illegal activities associated with cryptocurrency – which seems much more reasonable.