Bitcoin's value dropped to $61,000. And this is one of those rare occasions when the reason is obvious to anyone. The decline follows Mt. Gox's announcement of imminent creditor repayments.
Mt. Gox Rehabilitation Trustee Nobuaki Kobayashi confirmed the news.
Repayments in Bitcoin and Bitcoin Cash will begin in early July. The decade long wait is over. Yes, 10 years have passed since the exchange's collapse.
"We have taken time to ensure safe and reliable repayment to creditors," the note stated. It outlined steps taken, including technical safeguards and regulatory compliance.
Mt. Gox was once a dominant player in Bitcoin trading. It's hard to believe now, but it handled over 70% of Bitcoin's volume once. That was a pretty obvious centralisation, many people disliked. But then Mt. Gox collapsed.
The announcement sparked market concerns. Fears of a potential sell-off caused Bitcoin's price to fall 6.5% from the previous day. It hit a low of $61,060 before slightly recovering.
The price drop hit derivatives traders hard. Bitcoin long positions worth $90.78 million were liquidated in 12 hours. This data comes from CoinGlass, a derivatives analytics platform.
Market fears may be justified. Three Mt. Gox wallets hold 141,686 BTC, valued at approximately $8.71 billion.
Big moves like that often make waves on the market. A similar incident occurred on May 28. Bitcoin's price fell after funds moved to an unknown wallet. It was later clarified that repayments had not yet started.
The repayment deadline was previously extended to October 2024. This suggests the reimbursement process could take up to four months.