Mt. Gox Wallet Moves 8,200 BTC Triggering a Mini Market Crash
Mt. Gox ghosts are stirring up trouble again as 8,200BTC leave their wallet.
You probably got a bit of a shock his morning during your daily coinmarketcap.com refresh with red color all over the front page. It turns out that the Mt. Gox trustee, who was tasked with selling about 200,000 bitcoin after the bankruptcy of the now-defunct cryptocurrency exchange, is suspected to have unloaded another 8,200 bitcoin onto the cryptocurrency market.
If we ignore some of the nonsense FUD spread by Warren Buffett, Charlie Munger and Bill Gates on CNBC recently, the news has been mostly bullish in the last few days, so this market drop has undoubtedly caught many by surprise.
The market seemed to be gearing up for major institutional players to enter the cryptocurrency space, which should have encouraged the bulls to get in ahead of Wall Street.
“I’m actually a bit shocked that the market did not pick up on this. Dominic Chu of CNBC said that investors will get physical delivery of bitcoin. That doesn’t sound that interesting except for the fact that it means ICE Exchange has a custody solution. That has been the big hurdle. How do you hold onto these assets. These are generally bearer instruments, just like gold bearer bonds. That’s the big deal. They have come up with a custody solution for institutional holders,” said CNBC’s Fast Money contributor and BKCM founder Brian Kelly.
According to Kelly the cryptocurrency market is very volatile due to the relatively low daily trading volume compared to other traditional assets and markets like the NASDAQ and gold. As such, the movement of funds of less than a billion dollars can disproportionally impact the market rates of cryptocurrencies, especially if large amounts of bitcoin are sold on public exchanges.
Despite the criticism from the crypto markets, the Mt. Gox trustee has continued to sell large amounts of bitcoin on public cryptocurrency exchanges, which has led to a very timid and reactive price of Bitcoin and in turn the whole cryptocurrency market.
The OTC Option
Many believe that the Mt. Gox trustee should use Over-The-Counter (OTC) markets, where large-scale investors are looking to purchase large amounts of Bitcoins and are therefore much more appropriate for large transactions. It appears that the trustee has however continued to sell on the public exchanges, where the drop in price due to the dump cascades to the crypto market as a whole.
On the other hand, this may create an opportunity for brave traders to pick up some cheap Bitcoin 🙂