Rumors of Mt. Gox’s claim that 137,000 BTC was about to be sold on the open market were met with fierce suspicion as Bitcoin price volatility returned.
On Aug 27, Bitcoin (BTC) failed to maintain its $20,000 support as fears of a sell-off by users of the bankrupt exchange Mt. Gox contributed to price pressures.
Thin weekend liquidity seemed to aggravate already nervous markets, which reacted negatively to unsubstantiated suggestions that Mt. Gox cash will be released to creditors on Aug 28.
At the time of writing, claims varied greatly, with some assuming that a tranche of 137,000 BTC was going to be released all at once. Others claimed that monies will be distributed in stages, but that reimbursements would begin this weekend.
Almost ten years ago, Mt. Gox imploded with hundreds of thousands of Bitcoins. Following a protracted legal procedure dealing with funds recovered from the exchange, Nobuaki Kobayashi, the designated rehabilitation trustee, declared on July 6 that he was “preparing to make repayments” to creditors.
Kobayashi provided “the end of August” as a reference period for when some initial payments may commence in papers at the time.
“Following discussions with the Court and in accordance with the Rehabilitation Plan, the Rehabilitation Trustee plans to set the Assignment, etc. Restriction Reference Period from approximately the end of August this year until all or part of the repayments made as initial repayments is completed for safe and secure Repayments,” part of it read.
With no fresh official material appearing on the rehabilitation procedures’ dedicated website, it remained unclear why the sell-off rumors had gathered such steam so soon.
Meanwhile, according to trader and analyst Josh Rager, even if the whole BTC hoard was liquidated at once, the subsequent selling pressure would not result in the apocalyptic disaster some predicted.
Bitcoin is having a hard time holding onto its $20,000 support level after the Fed chair’s speech last week. It can be said that September will be the decisive month for the market when the new interest rate policy is announced at the FOMC meeting.
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