In addition to the roughly $9.5 billion in BTC the former exchange will return to its customers, Mt. Gox will also send back 143,000 BCH, worth around $73 million. This long-awaited development has created uncertainty in the market about how many investors will sell their holdings and through which venues.
Kaixo Research reported that selling pressure on BCH accelerated on Binance and OKX before the official announcement, particularly at the end of Asian opening hours on July 4. Several sell orders were executed on Binance around 9 am UTC as the market awaits the announcement.
The impact on BCH liquidity was evident, as price slippage for a simulated $100,000 sell order reached its highest level in over a month across most exchanges. This indicated worsening liquidity due to insufficient order book depth for large market orders. The highest slippage was observed on Itbit and Bybit. On July 5, BCH slippage rose from 0.2% to 2.8% on Bybit and from 0.3% to 3.5% on Itbit.
“Strong selling pressure related to the Mt. Gox repayment event has significantly impacted BCH liquidity,” noted Kaixo Research. The liquidity issues reflect the broader market’s reaction to the repayment announcement.
Mt. Gox, once the world’s top crypto exchange, handling over 70% of all Bitcoin transactions in its early years, was forced into bankruptcy in 2014 after a hack resulted in the loss of an estimated 740,000 Bitcoin.
The announcement of repayments has added selling pressure on Bitcoin and the broader crypto market, with Bitcoin plunging to its lowest level in five months. This freefall led to over $580 million in bullish bets being liquidated.
Exchanges approved by the trustee to process repayments include Bitbank, BitGo, Bitstamp, Kraken, and Japanese exchange SBI VC Trade.
Source: Cryptocurrency - investing.com
