Although Bitcoin briefly touched the $70,000 level in the past two days, it only touched it briefly, and then fell sharply to a low of around $65,000, a short-term drop of nearly $5,000, which looked like a dive.
The crypto market is facing a dilemma of all the good short-term events, including Ethereum spot ETF, Trump's participation in the Bitcoin Conference, etc., which have become a thing of the past, and some good things in the future, such as the Fed's interest rate cut, are still far away. On the contrary, Bitcoin may continue to face severe selling pressure, such as Mt. Gox repayment and the US government's Bitcoin holdings began to move. These events will bring considerable downward pressure to the market.
Mt.gox repayments are not over yet, there are still $5 billion in Bitcoin on the address
According to Arkham monitoring, the Mt.gox address still holds more than 80,000 bitcoins, worth more than $5 billion. These tokens may be transferred and repaid to users at any time. Since the repayment process began on July 16, the number of bitcoins held by Mt.gox has dropped from approximately 140,000 to the current 80,000, and the value has dropped from $9 billion to $5 billion. It is expected that Mt.gox's repayment will continue for some time, but the market has gradually adapted, and the impact of the sell-off caused by Mt.gox is expected to become smaller and smaller. Mt.gox mainly repays creditors by transferring coins to Kraken and Bitstamp exchanges. It is said that creditors encountered some withdrawal problems on the exchanges last week, but these problems have been basically resolved.
The most recent repayment from Mt. Gox occurred about a week ago, when 382 bitcoins were transferred to Bitstamp. However, one Mt. Gox address (12Rgp) transferred 0.02 BTC, worth $1,350, to another address beginning with 1Adb. The same address also transferred 0.0001 BTC to an address beginning with bc1q. These transactions suggest that Mt. Gox is conducting test transfers before moving the remaining 80,128 BTC it holds.
US Government Transfers Bitcoin
Even more noteworthy than Mt. Gox is the Bitcoin held by the U.S. government. The U.S. government currently holds 203,239 Bitcoins, worth nearly $13.5 billion, which is far more than Mt. Gox. The U.S. government has recently transferred some Bitcoins, which has also exacerbated market pressures. Arkham Intelligence reported that the U.S. government transferred 29,799.99 Bitcoins (worth $2 billion) on Monday.
Just before the transfer, former US President Donald Trump announced at a Bitcoin conference that if he is re-elected, he will keep 100% of all Bitcoin currently held by the US government or acquire Bitcoin in the future. However, as Peter Schiff hinted in his latest tweet, the latest BTC transfer by the US government has sparked speculation of a massive sell-off. Some people joked that Biden would sell all Bitcoin before Trump was elected.
What good news will the crypto market have next?
In addition to the two major selling pressures from MT.GOX and the US government, the crypto market may also usher in some positive factors later this year, such as the liquidation of FTX debt, with an estimated $16 billion in cash flowing into the market.
The liquidators of FTX Digital Markets Ltd. have recently initiated the next phase of the liquidation process. FTX.com customers will need to choose whether to participate in the official liquidation proceedings in the Bahamas (the “Bahamas Process”) or the Chapter 11 case in the United States (the “U.S. Process”), and must make their choice by 4:00 a.m. on August 17.
This may mean that FTX liquidation compensation is not far away. Earlier this month, Tom Dunleavy, former senior research analyst at Messari, wrote on the X platform: "In October and November of this year, FTX will provide creditors with $12 billion to $16 billion in cash. Basically, I think this is all buying power."
Crypto analyst Ash Crypto wrote that people are worried about the Mt.gox-induced crash and other negative factors, but some factors will push the crypto market to new highs, such as FTX's plan to distribute more than $16 billion in cash to its creditors.
Given that most of FTX’s customers are cryptocurrency enthusiasts, a massive amount of $16 billion will enter the cryptocurrency market and become the biggest catalyst for price increases.
Remember two key dates:
- August 16, 2024, the deadline for creditors to vote
- October 7, 2024, the final approval date for the liquidation plan
In conclusion, the allocation of FTX funds may well mark a turning point for the crypto market.
