Almost a month ago, a correlation was revealed between Bitcoin’s January price crash and the huge sale of assets by Mt. Gox. This has led many to blame the recent crash solely on the bankrupt exchange. Since this has happened, traders have been worried for the future of cryptocurrency as a whole. Around $18,000 worth of Bitcoin and Bitcoin Cash was sold by the Mt. Gox account, and a remaining $160,000 is left attached to their known addresses. If such a small fraction of their money could cause such a huge dip, it is entirely possible that the rest of their money could cause an even larger drop.
To find out whether we should be worried about Mt. Gox and their selling of assets, I reached out to three experts within the cryptocurrency and financial industry to get their take on the situation.
Jitendra Rajput is a Co-founder as well as Consultant and Researcher at Encrybit. Jitendra started research on Cryptocurrency in 2015 and served as an advisor to many bitcoin and blockchain businesses. He is now determined to start his own cryptocurrency exchange called Encrybit to help users with marketing and investment benefits using cryptocurrency. The main aim will be to attain maximum payback by trading with this emerging technology.
I heard about the news and that everybody blames Mt. Gox’s trustee Nobuaki Kobayashi for the decreasing prices of bitcoin as he sold vast amounts of BTC and BCC at one shot. As per his statement on March 7, he sold 35,841 BTC and 34,008 BCC and generated funds around $400 million. These were not sold in one single transaction. The number was divided and the transaction took place from December 18, 2017 to February 5, 2018. The total volume of transaction done on particular days between this time periods is around 1%. And I personally do not believe that such low volume of the transaction can affect the bitcoin core or bitcoin cash prices. I understand that bitcoin prices have slashed since the end of 2018, but the selling by Mt. Gox isn’t liable to be blamed. If the volume percentage was higher, I can readily agree to the news but it is around 1% only and that stops me from believing the facts others have proven.
Linda Leaney is the CFO of Globcoin.io, an investment Banking professional, and is currently involved in harnessing traditional risk management techniques and applying them to new technologies. Globcoin is a decentralized cryptocurrency management system that is focusing on improving the technology behind stablecoins. Linda Leaney has nearly 20 years of banking and financial experience.
Edmondo is a cryptocurrency and Forex investor with ten years experience. He works closely with a select handful of traders to whom he offers personalized advice and crafts up-to-date guides and strategies.
I seriously doubt that the actions of one seller could cause such a harsh crash to the market. No matter what financial industry you are in, you will always find people who think they have worked out just what caused the market to correct itself, but more times than not we can never verify whether they are true or not. I don’t think Mt. Gox could have such an ability to tank the market like this, but they may have contributed to it. Regardless, we should not be placing the blame solely on one factor. That does not solve any problems. If people want cryptocurrency to succeed and match its all-time-highs, we need it to see more mass adoption.
So what do you think? Can one seller hold that much power over the crypto markets, or do you think there is something else at play here? Why not let us know in our Telegram community chat?
Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.