Bitcoin Industry

Bitcoin Price Will Likely Surge as Mt. Gox Sell Off Paused Until September

Thomas Delahunty | March 11, 2018 | 7:30 pm
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Bitcoin

Bitcoin Price Will Likely Surge as Mt. Gox Sell Off Paused Until September

Thomas Delahunty | March 11, 2018 | 7:30 pm

Over the past several days Bitcoin has experienced a large drop in value. The entire market has followed this trend, with Ethereum, Bitcoin Cash, and Ripple all declining by similar margins. Analysts have attributed the recent fall to a massive sell-off of almost 40,000 Bitcoin by a Mt. Gox trustee.

Mt. Gox Sell-off

Tokyo-based cryptocurrency exchange Mt. Gox was formed in 2010, and just four years later was responsible for over 70% of all Bitcoin transactions worldwide. Unfortunately, in 2014 the exchange closed down and filed for bankruptcy following the theft of approximately 850,000 Bitcoin.

The problem today is that creditors are still after the missing money. And it has been reported that Nobuaki Kobayashi, the lawyer and trustee of Mt. Gox, has sold 35,841 Bitcoin and 34,008 Bitcoin cash — worth more than $400 million — over the past few months, starting in September of last year.

Many in the industry have thrown shade at Kobayashi, claiming this influx of Bitcoin contributed to the intense volatility in the market in December and January, as well as more recent pricing downtrends. The Mt. Gox trustee holds still holds about 166,000 Bitcoin — worth more than $1.5 billion at the moment.

This has attracted a lot of attention, but there may be some good news: the next court proceeding for the Mt. Gox bankruptcy isn’t scheduled until September 18th, 2018. It is likely, then, that before that date Kobayashi won’t be able to dump the remaining 166,000 Bitcoin onto the open market. Traders have been watching this case closely, and if this turns out to be true, it could mean good things for Bitcoin’s price.

What Happened?

Details of Kobayashi’s transactions published earlier this week indicate that the mass sell-off was potentially a driving force behind the December 2017 and January 2018 Bitcoin pricing slump. Analysis of the transactions suggests a correlation between the sales and Bitcoin’s bearish price action in late December 2017 and early 2018. The sales seem to have further shaken a market already in a downward trend following regulatory crackdowns, hacked exchanges, and fraud.

When off-loading a large volume of cryptocurrencies, a seller is required to accept lower and lower bids, which in turn causes the price to drop rapidly. Some traders watching the market closely may see this as a signal of an oncoming crash and quickly sell their holdings before it drops even further — a snowball effect can occur and a market can quickly experience a crash.

Moving Forward

As noted above, many are hopeful that with the next Mt. Got court date six months away, Kobayashi won’t be able to dump another load of coins on the market. That said, some are hesitant: this Twitter user, a Japanese investor, claims that, in fact, the September 18th court hearing is irrelevant because Kobayashi already has been authorized to sell-off — meaning he doesn’t have to wait to off-load more coins.

Regardless of what actions Kobayashi takes moving forward, hopefully, the future sales will be more transparent and not contribute to FUD and associated Bitcoin market downturns.

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  • Winnie Oriana

    ………and where are the other 648.159 Bitcoins?

    • iNGO

      Exactly. It just goes to show how biased most presentations are. Be happy about some possibly 6 month of rising prices and ignore how much more money will be lost when the selling is resumed? And doesn’t it seem notable that in the face of the effect that $40 000 had, there is 16 times the power in the hand of some hackers, and other tokens owned by early adopter individuals or just other hackers, scammers, whoever, who have the power to orchestrate the daily drama of the entire cryptoworld? As for diversification, as long as other coins are so closely tied to BTC and its price, they cannot healthily develop. Anyone “disappointed” by altcoins lately needs to open their eyes and connect the dots. How can anyone not see that almost all altcoin prices follow the price of BTC?

      • Ravener

        Every new and existing altcoin exchange that wants to remain relevant is planning fiat -> altcoin pairings in the coming months. For altcoin traders, the ability to buy and trade alts without passing through a filter of btc or eth will be the first step toward freedom.

        The only good thing about this manipulated FUD is to wake more people up to the need to decouple from BTC and realize it is actually possible, not a dream.

        Then it will be on the altcoin to actually sink or swim based on their own merit as a currency or utility token.

      • yonton

        The market can easily absorb that amount of bitcoin.The recent drop was going to happen anyways, and this bitcoin was only a small part of why bitcoin needed a correction. The next time the lawyer sell’s it will most likely happen OTC which means not on exchanges and will not impact the price of bitcoin in the least.

  • jwvanderbeck

    Seems to me if this is correct then it disturbingly leads credence to the skeptics who claim Bitcoin is a ponzi scheme, or the claims by the UK whomever it was claiming that entire market would fall apart if everyone tried to cash out at once.

    I don’t personally think that is entirely true, but it is somewhat scary if this mass sell off can have such a huge effect on the market.

    • Aaron

      Of course the market would crash if everyone cashed out at once. So would any market. Imagine if everyone sold their Google or Apple stock all at once…Google and Apple stock would crash, right? Same with Bitcoin. That doesn’t make it any more or less legitimate and certainly doesn’t make it a ponzi scheme.

      • jwvanderbeck

        That’s a fair point

        • Aaron

          Everyone who doesn’t understand Bitcoin, wants it to be a Ponzi scheme. It makes them feel better about not participating in it. They point to people getting in early making a ton of money while people getting in late not making as much. I always answer that argument the same way I answered yours…OF COURSE people who get in early make the most money. What investment isn’t that way? I got into Bitcoin last September. I’m certainly not rich, but I’ve done well. Others got in when it was at all time highs and lost money. So it goes, again, with any investment. The truth is, no one knows which cryptocurrencies will survive and which will fail. Much like the start of the internet…we didn’t know which online platforms would survive. Turns out, Google and Amazon were the best investments….but I remember when AOL was all the rage. One thing is for certain, some of these will win big and some will fail.

          • jwvanderbeck

            Yeah I don’t get the “ponzi scheme” arguments either. Fair disclosure, I hold long positions in BTC, ETH, and NEO.

          • Aaron

            Good portfolio. I hold BTC, XLM, XRP and ETH long term. These companies have strong fundamentals that I believe have huge potential.

          • jwvanderbeck

            Almost exactly what I used to have but Stellar and Ripple have been hugely disappointing to me recently 🙁

            Of course as you said, no one can be sure who the big winners will be in 10 years time.

          • Aaron

            I agree…XLM and XRP have been disappointing. So have most of the other currencies. I’ve noticed they go in waves. Get hyped, pull back massively, then settle into a more normal, reality based pattern. The market as a whole has been bearish for the past 6-8 weeks. I’m not looking at the hype, rather focusing on the fundamentals of each company. Digging into the team, partnerships and progress XLM and XRP have made during this down time, I’m very optimistic about their future. It’s tempting to chase all the latest coins like Nano, Waltonchain, etc. I dabble around in some of those, but for the long term, you can’t ignore the fundamentals XRP and XLM have. I’m convinced they’ll play a large part in the future of crypto.

          • Nayeem

            Cardano!

          • Ravener

            All you suckers with your newfangled Eee lectricity, whale oil lamps ain’t going nowhere.

    • Uros Gavrilovic

      Honestly, what do you think would happen if all people in the world tried to cash out their money from the Banks… Lol, would be hilarious watching Banks bancrupt one by one and people left without their money. Think about it. Wouldnt that logic than make monetary system and Banks Ponzy as well, just on a global scale 🙂

  • Ilya Elbert

    ANY market would fall apart due to a mass sell off…..I don’t see how bitcoin is any different.

  • Vindoh Ohpen

    Well it be in his best interest to not crash the market, rather or he could do so and buy it back up. Probaly just more market manipulation. It feels like many forces restraining bitcoin prices, if they left it alone it be at 25k already.

  • John watson

    The title is misleading! The good author should reflect the truth. The author preferred to present a false speculation as truth. Kobayashi has the authority to liquidate btc as several Japanese resources confirm.

    • Edgars Glaudāns

      where you got that from?

      • He probably got it directly from Kobayashi-San himself. LOL

  • cherazor65

    The problem is not Only the Mt Gox selling because it’s not enough BTC to crash it, but obviously whales found out (or were informed) what’s getting on and started joining the selling and were shorting same time. This should be investigated and the trustee fired for incompetence because he wasted so much money by selling in open market instead of auction or OTC.

  • MIS

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  • Spam

    Well this post didn’t age well…

  • Laurie Bradshaw

    sell or buy bitcoins at furcoins people and enjoy wonderful service.

  • I thought there was a specific date that Mt. Gox had to fully liquidate by. Anyone know when that is?

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