Initiating Creditor’s Email Verification
According to the renowned crypto journalist Colin Wu, the leading Japanese Bitcoin exchange, Mt. Gox, is set to begin its repayment to creditors. The crypto exchange has introduced a rigorous email verification process to determine whether users’ exchange address accounts have been officially designated payment addresses for Bitcoin (BTC) and Bitcoin Cash (BCH).
While the exchange previously delayed payouts last year to October 2024, some creditors who had previously submitted the necessary information will likely get BTC repayment within the next two months. Mt. Gox’s renewed strategy follows December 2023 reports, in which creditors claimed to have received compensation in Japanese yen directly to their PayPal accounts.
Meanwhile, potential creditors recently received emails from the Rehabilitation Trustee verifying ownership of their accounts. This identification verification is performed via the crypto exchange or custodian previously chosen as the payment address for BTC and BCH.
Fears Over Bitcoin Selloff
Following this development, Mindao Yang, founder of the decentralized stablecoin system dForce Network, has cautioned the crypto community in a recent post on X. Yang points to a potential BTC price impact since Mt. Gox creditors will likely sell most of their received BTC over the next two months.
The evolving scenario raises serious concerns, particularly over the large amount of Bitcoin that Mt. Gox intends to repay its creditors. Nevertheless, market participants are on high alert as the countdown begins for the probable release of 200,000 BTC in the next 60 days.
It is worth noting that Mt. Gox also possesses 143,000 BCH, which will impact the digital asset’s price if the exchange pays its creditors in this cryptocurrency. The simultaneous presence of an additional 69 billion yen under the exchange’s authority raises concerns about the impact of these repayments on the broader financial markets.
Why Is BTC’s Price Dropping?
The significant drop in the value of Bitcoin can mainly be explained by large withdrawals from Bitcoin exchange-traded funds (ETFs). For example, the Grayscale Bitcoin Trust (GBTC) witnessed a record outflow of $640 million in a single day, its largest ever.
At the time of writing, the total amount withdrawn had already exceeded $3.45 billion, per James Seyffart, a prominent NFT analyst, in a social media post. In a related observation, analyst Holger Zschaepitz opined that there is a diminishing interest in Bitcoin ETFs.
His sentiment is consistent with a notable reduction in the correlation between Bitcoin and technology equities, which reached a low of 0.3 over the last week. Zschaepitz’s analysis indicates a change in investor views and a probable divergence in the usual relationship between Bitcoin and technology-related assets.
Broader Bearish Sentiments
With BTC’s price plummeting, famous Bitcoin critic, Peter Schiff, has voiced his worries, mainly about the ProShares Bitcoin Strategy ETF. This ETF has lost over 50% of its value in over two years after debuting in October 2021, indicating poor performance.
The price of the leading digital asset was $38,881 at the time of writing, according to Coinmarketcap data. The same data further shows that its market cap has dropped by 4.68% in the last 24 hours to $761 billion, while its trade volume over the same period is over 79%, indicating more bearish pressure.
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