Rumors that the well-known exchange Mt. Gox creditors may be selling a large amount of Bitcoin have added another fire to the cryptocurrency market, which is already caught in a profit-taking whirlpool.
On Friday, Bitcoin fell by 8% to $53,523 at one point, hitting its lowest level since the end of February this year. More surprisingly, Bitcoin's cumulative decline this week has exceeded 13%, marking the largest weekly drop since the collapse of FTX in November 2022.
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Mt. Gox, located in Tokyo, Japan, was once one of the world's largest Bitcoin exchanges, handling over 70% of global Bitcoin transactions at one point. After the Bitcoin theft scandal, Mt. Gox went bankrupt in 2014.
Now, media reports suggest that Mt. Gox has started returning Bitcoin to its creditors, who are likely to choose to sell these Bitcoins as their value has significantly appreciated since 2014.
According to blockchain analysis company Arkham Intelligence, earlier on Friday, Mt. Gox transferred 47,228 Bitcoins (worth about $2.6 billion) from a cold wallet to a new wallet. This indicates that the exchange plans to start distributing the assets stolen from customers in the 2014 hack.
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Last month, Mt. Gox announced that it would repay creditors by paying 140,000 Bitcoins (worth $7.73 billion), 143,000 Bitcoin Cash (BCH), and Japanese yen. Since then, traders have been worried that creditors who have been waiting for repayment for a decade will immediately sell the tokens upon receipt, putting significant selling pressure on the market. Note that when Mt. Gox was hacked in 2014, the price of Bitcoin was around $600, but now it has exceeded $54,000.
IG market analyst Tony Sycamore said:
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The selling pressure is still related to the selling by creditors of the bankrupt Mt. Gox exchange. However, the accelerated decline in Bitcoin indicates that the market is trying to anticipate the actions of creditors.
</blockquote>
The analyst also pointed out that people are concerned that after Biden's poor performance in the first debate, a less crypto-friendly Trump being elected as the new U.S. president.
In addition, Antoni Trenchev, co-founder of the crypto platform Nexo, said:
<blockquote>
What is striking about this significant drop in Bitcoin is that it is happening while U.S. stocks and global stock indices are at or near historic highs — the correlation between Bitcoin and the mainstream stock market is weakening.
Bitcoin has been performing strongly since the introduction of spot ETF in the United States at the beginning of the year. In mid-March, it hit a historical high of $73,803.25, but has since been on a downward trend, falling below the $60,000 mark in late June.
</blockquote>
Currently, traders are anxiously awaiting the U.S. non-farm payroll report to be released on Friday. Wall Street expects a 190,000 increase in non-farm employment in June, a significant drop from May's 272,000, only slightly higher than the data in April; average hourly wages are expected to fall below 4% year-on-year for the first time since 2021. Analysts believe that if the results meet expectations, the Fed will have enough evidence to start cutting interest rates in September.
The CME Group's FedWatch tool shows that since the soft PCE inflation data was released last Friday, traders have almost priced in expectations for two interest rate cuts this year.
Jag Kooner, head of derivatives at cryptocurrency exchange Bitfinex, said, &#34;If Friday's employment data shows weaker job growth than expected, expectations for dovishness and support for risk assets may be further strengthened.&#34;
<blockquote>
If the non-farm payroll report shows weaker job growth than expected, this could solidify expectations for future rate cuts, which could boost Bitcoin prices as investors seek alternative assets in anticipation of loose monetary policy.
</blockquote>
Kooner also said that if &#34;market participants believe that economic uncertainty will drive the Fed to cut rates,&#34; the inflow of funds into spot Bitcoin ETFs may accelerate

Bitcoin has fallen by more than 13% this week, marking the largest weekly decline since the closure of FTX in November 2022. Reports indicate that the now-defunct Mt. Gox exchange has started returning Bitcoin to its creditors, who are likely to choose to sell these Bitcoins

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Bitcoin falls below $54,000, marking the largest weekly decline since the collapse of FTX