Could the Mt. Gox related BTC selling be mostly over?
Could there be a light at the end of the tunnel?
This past week it was revealed that the trustee for the Mt. Gox bankruptcy case had been selling bitcoin and bitcoin cash holdings to raise funds for defrauded investors.
The amount sold thus far was said to be roughly 40,000 bitcoins, which was worth just over $400 million. ($405 million to be exact)
That dollar amount is important and I will touch on that a little more later on.
How it was done:
For now, here is chart put together by a user on Reddit detailing the sells made by the Mt. Gox bankruptcy trustee from the roughly 200,000 bitcoins they were able to recover:
(Source:https://www.reddit.com/r/CryptoCurrency/comments/82ryay/ive_mapped_the_exact_time_when_money_was/)
As you can see, in many cases the selling by the trustee happened just before large drops in the price of bitcoin.
One might question how the selling of 6k-8k bitcoins, which is less than 1% of the trading float, could cause the entire market to tank...
The problem appears to be that they were sold all at once and they were sold on a single exchange, which would have been able to knock prices down on that exchange and cause selling pressure across other exchanges, triggering stop losses etc.
What is more, the trustee has "only " sold about 40,000. Which means he still has another 165,000 bitcoins that could possibly be dumped as well.
This fear of more dumping is part of what helped drive prices to those lows seen the last few days.
Remember that part about the amount sold thus far totaling roughly $405 million?
Here is why that is significant...
According to the bankruptcy filing, Mt Gox creditors were owed roughly $391 million USD.
Which means, it is very possible that the amount of $405 million that has already been sold would be more than enough to cover the USD portion that was owed to creditors.
What's more, there hasn't been any more selling from the bankruptcy trustee for over a month with the last sell taking place on February 5th.
Which means... it is possible that no more bitcoin will be dumped by the trustee any time soon.
It also appears I might not be the only one who thinks that...
Check out the comment from Tom Lee at the 4:18 mark on Fast Money last night.
It appears he is also hearing that the selling from the trustee might mostly be over, if not already over.
I don't know about you, but that is welcome news to me.
Stay informed my friends.
Follow me: @jrcornel
I think this is very bullish news. Why? Because most of that money will likely flow back into cryptos once the Trustee start distributing the fiat back to the victims.
Remember, those people watched bitcoin hit 19k while their coins were under the control of the Trustee!!
That is a very good point. I am not sure when that money will get distributed back. If I had to guess I would say it will take some time though.
I agree it could be bullish news, but for the longer term, because as jrcornel said it will take a while for it to happen.
Yeah @techwizardry you make a good point that Fiat money will land up coming back into the market at some point.
@jrcornel I read that he wont be able to sell anymore and the court case in Sept.... might be good idea to put that in our dairy as there could be some more sell off at that point...
Good comments and keep us informed. Steem On!
thanks for sharing! this week is quite crazy...
Market cap 5 quadrillion but cash in $50 and it loses 25% value kind of thing. The problem is that exchanges follow lower values easier than they follow higher ones just like what is happening with poloniex/steem right now.
That makes a lot of sense, I hope the trustee is now a full on hodler!
The FUD caused by the sell off was really big but I think the market will hopefully recover in a week!
Thanks @jrcornel for sharing this important news of Mt.Gox selling, hope that they wont sell anytime soon, it is profitable for them to sell at small intervals rather then selling all at once.
This would be very welcome news and I hope it's true. Bitcoin has been getting slammed, so if this trustee stops dumping the coins onto the market in a disorderly way that would really help. This person doesn't seem to know how to properly unwind a large position. It would be great if he has raised the money he needs in the immediate term to satisfy creditors and can sell of the remaining assets in an orderly way that does not disrupt the market and damage the value of his assets. He has a fiduciary duty to maximize the value of the assets in his care, and dumping them on the market is not the proper way to fulfill that duty.
the price of steem decrease bcz of btc exchange can they change exchange of steem with other
Thanks for keeping us updated