Bitcoin
Bitcoin Falls as Mt. Gox Payment Roils Crypto Market
Main conclusions
- Bitcoin fell on Friday along with crypto-related stocks, with the leading cryptocurrency recently trading at its lowest level in months.
- Mt. Gox’s bankruptcy trustee has started paying creditors, sending shockwaves through the cryptocurrency market.
- Mt. Gox, once the world’s largest bitcoin exchange, collapsed after a hack in 2014.
- The news weighed on shares of Coinbase Global and MicroStrategy, while ether fell along with bitcoin.
Prices of major cryptocurrencies as well as Coinbase Global shares (COIN) and MicroStrategy (MSTR), crashed on Friday as cryptocurrency exchange Mt. Gox began paying creditors.
Nobuaki Kobayashi, the trustee of the Mt. Gox bankruptcy estate, said the estate “made payments in Bitcoin and Bitcoin Cash to some of the rehabilitation creditors through a portion of the Designated Cryptocurrency Exchanges etc. in accordance with the Rehabilitation Plan.”
He noted that other creditors would be “promptly” repaid when certain conditions were met, including that it could be done “in a safe and secure manner.”
Bitcoin (BTCUSD) was trading around $55,700, down roughly 2.4%, as of 10:45 a.m. ET on Friday. Ether was down about 3.4%.
2014 Mt. Gox hack resulted in estimated loss of 740,000 Bitcoin
Mount Gox It was once the world’s largest cryptocurrency exchange, handling 70% of all bitcoin transactions. A hack in 2014 that resulted in the loss of around 740,000 bitcoins led to the company’s bankruptcy.
Anticipation of the Mt. Gox news, which Kobayashi signaled last month would happen in July, had already begun to shake the cryptocurrency market. Today’s announcement sent bitcoin to its lowest level in five months.
The impact was also felt at Coinbase, which reported $935 million in revenue from customer crypto trading in the first quarter, double what it did in the fourth quarter. MicroStrategy said in its first-quarter financial report that it held 214,400 bitcoins.
Coinbase shares fell about 5% to $213.87 as of 10:45 a.m. ET Friday, while MicroStrategy fell more than 6% to $1,220.11. Still, Coinbase and MicroStrategy shares are up about 23% and 93% year to date.