Crypto Market Surges Amid Mt. Gox Distribution News

Bitcoin (BTC) reached a four-week high on Tuesday, hitting $65,000 despite concerns surrounding the Mt. Gox estate’s upcoming asset distribution. The cryptocurrency rebounded strongly from last week’s lows, showing resilience as it surged above $65,000, a significant recovery from an earlier dip below $63,000. This price movement followed the transfer of $2.8 billion worth of BTC from wallets associated with the defunct Mt. Gox exchange, signaling preparations for creditor payouts.

Bitcoin price on July 16. Source: CoinDesk

Broad-Based Crypto Rally

The crypto market rally was widespread, with the CoinDesk 20 index (CD20) rising nearly 3% in the past 24 hours. Sixteen of the twenty index constituents were in positive territory, highlighting the market’s overall strength.

XRP Outperforms

XRP (XRP), the native token of the XRP Ledger payment network, was the standout performer among major altcoins. It surged 9% on Tuesday, extending its weekly gains to 35%. The rally in XRP was driven by increased holdings from large asset holders, known as whales, indicating strong conviction in higher prices. Crypto data provider Santiment noted this trend.

Institutional Adoption Boost

XRP received additional support from the announcement by derivatives trading giants CME and CF Benchmarks of new indices and reference rates for the token. Brad Garlinghouse, CEO of Ripple, the blockchain payments firm closely related to XRP, suggested that these developments could enhance institutional adoption of the token.

Mt. Gox Sell Pressure “Overestimated”

As the BTC sales in Germany conclude, crypto investors are considering the potential impact of the $9 billion in bitcoin soon to be distributed to Mt. Gox creditors. Ki Young Ju, CEO of CryptoQuant, believes concerns about sell pressure are overestimated and won’t derail the ongoing crypto rally.

“I believe this distribution won’t end the bullish trend, as the coins are expected to react to market sentiment similarly to the existing bitcoin supply,” Ju explained in a post on X. “Unlike the German government selling, Mt. Gox creditors aren’t forced to sell, so it’s not purely sell-side liquidity.”

Market Resilience

Prominent crypto and macro analyst Alex Krüger estimated that the maximum price drop for bitcoin would be around 10% if creditors decided to sell their reclaimed assets en masse. CoinMetrics also provided insights, suggesting that the market could absorb the distribution of approximately 65,000 BTC (worth around $1.95 billion at current prices) if liquidated gradually over a few weeks.

“The distribution of ~65,000 BTC could potentially be absorbed by the market over a period of a couple weeks without causing severe disruptions, assuming the liquidations are done gradually and across multiple exchanges,” CoinMetrics analysts wrote in a Tuesday report. They emphasized that these findings indicate the depth and maturity of the BTC market, likely alleviating fears of a near-term liquidity shortage.

Source: Coindesk