Massive Crypto Market Sell-Off: Mt. Gox Bitcoin Payout Fears May Wipe Out $170 Billion From Crypto Market

On Friday, the cryptocurrency market experienced another substantial downturn, exacerbating recent selling pressure. Bitcoin (BTC), for instance, saw its price retrace almost 20% since reaching highs between June and May and drop as far as $53,500 before stabilising again.
The market decline can largely be attributed to an announcement by Mt. Gox’s bankruptcy trustee of his intention to begin paying out repayments to creditors affected by its notorious hack, causing billions in losses for creditors impacted.
Thus, in just 24 hours the cryptocurrency market shed over $170 billion combined market capitalization.
Repayment of Bitcoin and Bitcoin Cash Commencing and German Government Selling-Off
Nobuaki Kobayashi, trustee for Mt. Gox bankruptcy estate trustee announced that Bitcoin and Bitcoin Cash repayments have started through various crypto exchanges.

Kobayashi stressed that remaining funds would only be returned to creditors once “specific conditions” had been fulfilled, including verifying registered accounts and concluding discussions with designated exchanges.
As crypto prices plummeted, liquidations in derivative markets was drastic – over 229,755 traders experienced combined liquidations worth $639.58 million over 24 hours alone! Of that figure, $540.46 million represented long trades taken up by investors hoping for long-term asset appreciation.
German authorities also contributed to market pressure by selling off approximately 3,000 BTC, or around $175 million, from their seizure of an unspent stash related to movie piracy operation Movie2k. Even after selling off this amount of cryptocurrency worth an estimated total of over $2 billion.
What Do Historical Price Cycles Indicate
In spite of recent volatility witnessed in cryptocurrency prices, analysts remain optimistic regarding its long-term performance.
Though Bitcoin prices may currently be under pressure from Mt. Gox repayments, experts expect a rebound toward the end of 2017. Crypto data and research firm CCData has reported that its current appreciation cycle may still reach new highs before becoming fully appreciated and setting all-time records in price appreciation.
Historical market cycles show that Bitcoin’s Halving event, in which new BTC supply is reduced by half, tends to signal price growth of 12-18 months following it; its most recent Halving occurred this April suggesting additional growth potential well into 2025.

Tom Lee, co-founder and head of research for Fundstrat Global Advisors, predicted in an interview with CNBC that Bitcoin will reach $150,000 regardless of Mt. Gox overhangs.
Launch of Ethereum exchange-traded fund (ETF) in US and approval of first US spot Bitcoin ETF earlier this year have contributed positively to market sentiment, signalling potential expansion and increasing mainstream adoption of crypto assets.
This daily chart depicts bitcoin’s price decline. Credit: BTCUSD on TradingView.com.
At press time, BTC was trading at $55,680 – reflecting an almost 21% decrease over the last month. Bulls in the market are keeping close tabs on $54,480 as an important support level that may prevent further price decreases and avoid breaking below key $50,000 level threshold.
Image and Chart Credit: DALL-E