‘Tokyo Whale’ ends Mt. Gox Bitcoin sell-off

Last week, news emerged that the trustee of bankrupt Tokyo Bitcoin exchange Mt. Gox had sold-off vast amounts of cryptocurrency.

Roughly $400 million worth of Bitcoin and Bitcoin Cash was sold to pay off creditors, according to recently published documents.

Although $1.6 billion worth of the cryptocurrencies remains to be liquidated, a decision about a sell-off won’t be made until September.

Analysts say this is helping to restore sentiment after news of the sale caused prices to tumble in recent days.

Brian Kelly, CEO of BKCM, says the halt until September is enough to restore faith for investors:

“It’s still hanging over but now we’ve got six months or so before that’s an issue.

“In terms of the Tokyo Whale, it’s a supply issue, but it’s also a sentiment issue.”

Buying time

This break, albeit only six months, is enough to have a positive impact on cryptocurrency markets.

The Mt. Gox trustee, Nobuaki Kobayashi, sold more than 35,000 bitcoin, according to details of the sale published last week.

Following the theft of 850,000 bitcoin in 2014, the exchange closed and filed for bankruptcy.

To liquidate Mt. Gox’s remaining 166,000 bitcoin, lawyer and trustee Kobayashi he needs to await regulatory approval.

The court hearing for approval is not until September 2018, according to reports.

Bitcoin prices briefly recovered at the beginning of this week.

The leading digital currency was up 6.96 percent from Friday’s close to a high of $9,915 Monday, according to Coinmarketcap data.

Prices later fell to a low of just under $9,000 on the same day.

Bitcoin dropped below $10,000 and lost nearly 18 percent of its value over two days following the Mt. Gox news.

Bitcoin’s 7-day performance

 

Since September last year, Kobayashi has sold 35,841 Bitcoin and 34,008 Bitcoin cash on behalf of the company.

According to Kelly, The flood of Bitcoin could have contributed to the recent drops in values, saying:

“It’s down 70 percent from top but at some point, you run out of sellers.

“It looks as though the market’s trying to bottom out.”

Caught by the FUD

Despite the hold on Mt. Gox selling, Bitcoin has been caught up in a whirlwind of FUD (Fear, Uncertainty, and Doubt) recently.

False rumors began swirling that the world’s largest crypto exchange, Binance, had been hacked.

News from Japanese regulators and a statement from the U.S. Securities and Exchange Commission that expanded its scrutiny to cryptocurrency exchanges also added to investor worries last week.

Jack Tatar, a managing partner at Doyle Capital Management, said in a statement:

“This is just one factor that’s impacting bitcoin at this point.”

Tatar said that Mt. Gox has “impacted the entire market,” adding:

“With this off the table, Bitcoin will rise in price.”