Bitcoin Price Drops as Mt. Gox Prepares for Creditor Payouts

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Bitcoin experienced a significant decline, dropping to its lowest level since late February. This decline was attributed to Mt. Gox transferring a substantial amount of BTC to a new wallet, potentially in preparation for creditor payouts. Bitcoin’s price fell to a low of $53,600 but has since recovered to slightly above $55,000, marking a 4.75% decrease over the past 24 hours. The broader digital asset market, as indicated by the CoinDesk 20 Index (CD20), also witnessed a decline of approximately 6.85%. The impending repayments by Mt. Gox involve 140,000 BTC (equivalent to $7.3 billion), raising concerns that creditors might promptly sell their coins upon receipt, leading to significant selling pressure in the market.

During this decline, major altcoins also suffered substantial losses, with Ether and Dogecoin being notably affected. Ethereum saw a decline of 7.5%, while Dogecoin experienced a drop of almost 11%. Data from Coinalyze revealed that over $580 million worth of bullish bets were liquidated, with the largest single liquidation order, valued at $18.4 million, occurring on Binance for an ETH trade. Additionally, open interest, representing the number of unsettled futures bets, decreased by 12%, indicating a withdrawal of funds from the market. Liquidations take place when exchanges forcibly close leveraged positions due to traders’ failure to meet margin requirements.

Amidst Bitcoin’s decline to $54,000, only five mining rigs remained profitable for their operators, potentially signaling a “local bottom.” F2Pool stated that at an electricity rate of $0.08/kWh, ASICs less efficient than 23 W/T operate at a loss. A kilowatt-hour (kWh) measures the energy consumption of an electrical device. F2Pool’s analysis highlighted four of Antminer’s rigs and one Avalon rig as profitable as long as prices stay above $53,100, while all other miners now cost more to operate than the rewards obtained by operators.

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