Bitcoin price has crashed below $56,000 following large transfers from Mt. Gox cold wallet and an address held by the German government. The price of Bitcoin dropped by 4.7% in the last 24 hours to trade around $55,261 during European business hours on Monday.
Mt. Gox Begins Repayment of Creditors
Bankrupt Japanese crypto exchange, Mt. Gox has started repaying creditors and is set to distribute $8.5 billion in bitcoin (BTC). Payments will be made in Bitcoin and Bitcoin Cash (BCH).
The exchange has already moved over 47,000 BTC, valued at $2.71 billion, today to an unknown address, making this its first significant transaction since May. Payments were made in several transactions including one of 1,545 BTC, worth $85 million, to a hot wallet connected to the Bitbank exchange.
The Bitcoin price drop reflects the market’s response to the long-awaited resolution of one of the most historic bankruptcies in the crypto industry. The drop is also one of the biggest downturns in 2024 after BTC briefly crossed the $71,000 mark in June.
German Government Sells Its Bitcoin Holdings
The German government has been selling a significant portion of its bitcoin holding, adding to the market supply. On July 1, it transferred 1,500 BTC worth about $95 million to several crypto exchanges including Coinbase, Bitstamp, and Kraken.
The German government began sending BTC to crypto exchanges last month after seizing 50,000 BTC from the film piracy site Movie2k in January.
There were reports that the US government also transferred 237 bitcoins related to the Potapenko/Turogin seized funds to an unknown address. The US government also holds large quantities of Bitcoin acquired through seizures and asset forfeiture. According to Arkham, the U.S. government holds over 200,000 BTC, valued at around $13 billion.
The transfers have caused panic among investors who expect a wave of selling pressure that could disrupt the market further.
Tron founder, Justin Sun, said on X that he is willing to buy the remaining BTC from the German government off-market, to reduce the impact on the market.
Ethereum has also experienced a significant decline with the second-largest crypto falling to $2,874.67, an 8.8% drop in the last 24 hours. Other altcoins including BNB, XRP, Cardano, and Toncoin have fallen by more than 15%.
It is important to note that the market experienced liquidations amounting to $685.23 million after 236,365 traders were liquidated on Binance in the last 24 hours. Ethereum traders saw liquidations totaling approximately $167 million while Bitcoin Cash saw about $3.8 million in liquidations.
The crypto market has returned to a bear run following a drop in market capitalization by more than 11% and market cap by 8% in the last 48 hours and 24 hours respectively. This has caused investors to love over $250 billion.