Crypto Crisp: There it was, the height of Mt. Gox fear
It was only a matter of time. Today, Mt. Gox confirmed that it will begin distributing its Bitcoin and Bitcoin Cash holdings to creditors, primarily former clients, starting in July. The announcement did not specify the exact date or the timeline for the repayments.
The crypto market reacted poorly to this news, with Bitcoin dropping nearly 4% since the announcement this morning. This decline has resulted in the liquidation of nearly $300 million in long positions in the futures market over the past 24 hours, and the Bitcoin perpetual futures funding rate has turned negative. There is widespread panic, with fear of $8.5 billion worth of bitcoins hitting the spot market in the near future, but we urge everyone to remain calm. In fact, we think we have now seen the maximum fear we expected in a note a few weeks ago. More details on that below.
The Mt. Gox estate announced today that it will begin repaying creditors, with the total repayment amounting to as much as $8.5 billion, starting in July. The market reacted negatively to this news, causing Bitcoin to drop by 4%. However, we believe we are at or near peak panic, so there is, in reality, not much to fear.
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