It seems that this past week spelled nothing but trouble for Bitcoin, different events shook the market with happenings such as the SEC statement and the Mt. gox sell off.
The popular cryptocurrency faced drop in its value right after the U.S. Securities and Exchange Commission (SEC) issued a statement questioning the legality of cryptocurrency exchanges, spreading widespread panic among the cryptocurrency industry and causing all cryptocurrencies’ value to tank.
The market is still struggling to recover from the move, but it seems that it will take some time.
While other cryptocurrencies have managed to minimize their suffering, Bitcoin’s drop in value continues, allegedly due to another piece of news that has taken the cryptocurrency industry by storm.
Mt. gox trustee involved in sell off
A trustee of the now infamous Mt. Gox, the exchange which was the subject of one of the worst hacks in cryptocurrency industry, recently released 40,000 of their Bitcoin – creating newfound speculation for the cryptocurrency’s price.
What added fuel to the fire was the fact that the release was not made through a peer-to-peer or over the counter platform where users could buy them easily, but through a cryptocurrency exchange, which only led towards the market witnessing an influx of Bitcoin.
That allegedly resulted in Bitcoin’s value to drop to one of its lowest ever figure since February 12, 2018.
However, that is not stopping the Mt. Gox trustee from liquidating even more Bitcoin from their supply. The trustee will be releasing their remaining Bitcoin in the next few months. The number of Bitcoins stands at over 165,000 for now (worth over $1.5 billion at press time).
No specific plans were shared by the trustee on how they want to proceed with the release of the additional Bitcoin, but judging by this recent behavior and how it was executed, it would not be too presumptuous to say that it could be through an exchange as well – that is, if their mind does not get changed by seeing how the alleged affect took place by their decision.
People have mixed feelings about bitcoin’s drop in value due to Mt. gox selloff
The alleged link between the sell off and Bitcoin’s drop in value is causing people to question the very credibility of Bitcoin’s established value.
Speaking on the issue, the co-founder of Ethereum and founder of Cardano, Charles Hoskinson, mentioned that Bitcoin might have been overvalued in the first place, and that allowed it to reach unprecedented success.
“Was bitcoin really worth $20,000 a coin if an event like this has such a profound impact on the market?” Hoskinson posed the question. “We need an index of how much the market can afford to liquidate without crashing for each cryptocurrency; call it the ΔL metric.”
However, other members of the community maintain the stance that attributing the drop in value to this sell off does not make much sense in the first place.
One of such statements that are being widely quoted by other publications – such as Yahoo! Finance – is from analyst WhalePanda on Twitter.
Giving their two cents on the situation, they wrote that an amount of 40,000 Bitcoin could not affect the market this much, and people need to rethink their approach about this.
“MtGox was terrible and the incompetent way they are handling is terrible, saying that Bitcoin has been crashing since ATH because of it is just silly. It’s “only” 40k $BTC. It is about the same as claiming that Tether caused the run to $20k. People love their narratives though.”