Bitcoin Drops to Five-Month Low Below $55,000 as Mt. Gox Repayment Announcement Impacts Market
Bitcoin experienced a significant drop to below $55,000, hitting a five-month low following the announcement from the defunct exchange Mt. Gox about its commencement of repaying creditors. Mt. Gox’s Rehabilitation Trustee declared on July 5 that the repayment process has initiated through specific crypto exchanges as outlined in the rehabilitation plan.
For creditors to receive prompt repayments, they must fulfill certain criteria, including verifying the legitimacy of registered accounts, agreeing to subscribe to an agreement by designated crypto exchanges, and concluding discussions with the trustee. The confirmation of this repayment began with Mt. Gox moving a substantial amount of Bitcoin in multiple transactions. According to data from Arkham Intelligence, Mt. Gox transferred 47,228.7 BTC, valued at $2.71 billion, to a new wallet, subsequently distributing the assets across various transactions, including 1,545 BTC, worth $85 million, to a wallet linked to the Bitbank exchange.
The crypto community has welcomed this development, marking the end of a decade-long wait for Mt. Gox’s creditors to retrieve their digital assets. Mt. Gox encountered a significant hack in 2014, resulting in the loss of 850,000 Bitcoin, now valued at over $57 billion. Subsequent to the hack, Mt. Gox filed for bankruptcy and initiated rehabilitation proceedings in 2018 to compensate its creditors.
In response to the Mt. Gox repayment news, Bitcoin’s price plummeted by more than 7.2% to $54,209. This drop marked the first instance since February 2024 that the cryptocurrency fell below the $55,000 threshold, according to data from CryptoSlate. The decline triggered one of the largest liquidation events in the industry this year, with Coinglass reporting that crypto traders speculating on digital asset prices lost over $675 million within a 24-hour period.
Of the total losses, long traders anticipating price increases suffered around $578 million in losses, while short traders faced a $98 million loss. Bitcoin traders bore the brunt of the liquidations, with over $225 million liquidated in the past day. Ethereum traders also experienced significant liquidations totaling approximately $167 million. Interestingly, Bitcoin Cash, another digital asset connected to the Mt. Gox repayment, witnessed liquidations amounting to approximately $3.8 million.
