Mt. Gox bitcoin movement spooks cryptocurrency traders
The bitcoin whale migration has traders spooked, but there might be little to worry about.
The majestic sight of 16,000 BTC and BCH migrating from Mt. Gox cold wallet addresses has spooked traders and sparked concerns of another potentially market-crashing cryptocurrency sell-off.
The Mt. Gox affair came back into the limelight in early 2018 after it was reported that the trustee of the ill-fated exchange had sold 65,000 bitcoin in several stages, each of which coincided with a distinct drop in bitcoin prices from December to February. Now it's back, with the latest movement leaving some traders worrying about a similar drop.
The concern is understandable, given the precedence, but some experts are saying there's probably nothing to worry about. First, Mt. Gox trustee Nobuaki Kobayashi has previously said that the initial sales took place OTC, suggesting that the corresponding price movements were mostly coincidence.
"If they are smart about it, it won’t have a material impact," said Martin Garcia, Genesis co-head of sales and trading to MarketWatch.
Second, it's a much smaller sell-off in a very different market. The current 16,000 BTC movement is just a fraction of the previous 65,000 BTC sale, and cryptocurrency prices might be a bit more robust now than they were previously.
"It all depends on the market at the time," Garcia said. "If it’s going up, the market will absorb it easily."
However, it's also possible that the suggestion of a rocky road will be enough to impact the market, and lead some of the more cautious traders to back off until the potential turbulence is over. The worry alone might be enough to affect prices, regardless of whether there's anything to actually worry about, and the prospect of other people panicking may also be a cause of concern.
Bitcoin Cash might be slightly less robust and much more thinly traded than bitcoin though, and Kobayashi is also moving 16,000 BCH, so Bitcoin Cash holders might have a bit more cause for concern. But even then, there's no clear reason why this trade wouldn't be done OTC, especially after the accusations flying around following the previous sell-off.
With only 16,000 BTC and BCH being moved, the markets probably have nothing to fear from Mt. Gox except fear itself.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
- Why Ethereum’s London upgrade (EIP-1559) is going to make your ETH a lot more valuable
- Ethereum’s price rallied ahead of EIP-1559, but is a correction on the way?
- PayPal CEO claims Bitcoin has been highly profitable, and plans to expand crypto operations
- Ethereum may hit AU $19k if it is able to maintain its current path, expert suggests
- Bitcoin price analysis: Technical indicators suggest a new bull run is on the way