- Bitcoin’s value plummeted to $57,043 early today.
- Analyst Lark Davis attributes the crash to fears of Mt. Gox selling 140K BTC worth $9 billion.
- Mt. Gox plans to start repaying customers in BTC, BCH, or cash this month.
Cryptocurrency pundit Lark Davis recently commented on the persistent bearish sentiment in the crypto market, which has lasted for nearly a month. Earlier today, Bitcoin hit a low of $57,043 and had not recovered from this significant drop at press time.
According to Davis, the market is reacting to fears surrounding the bankrupt Japanese exchange Mt. Gox, which might sell Bitcoin valued at over $9 billion. He noted that the market is reacting to the fear of these potential sales, not the actual sales, which have not yet occurred.
Late last month, Mt. Gox disclosed that it would begin repaying customers whose funds have been trapped on the platform for a decade, starting in July. Customers can receive their repayment in Bitcoin (BTC), Bitcoin Cash (BCH), or an equivalent value in cash.
Notably, the defunct platform has 140,000 BTC valued at around $9 billion under its watch. Davis reassured investors that this billion-dollar selling pressure would not hit the market all at once, as claimants have four months to reclaim their assets.
Furthermore, the analyst noted that the U.S. and German governments also contribute to the market’s fears. Within the last hour, the German government transferred 3,000 BTC worth $174 million, with about half going to exchanges Coinbase, Kraken, and Bitstamp.
According to a recent update from market watcher Lookonchain, the German government still holds 40,359 Bitcoin worth over $2.3 billion after selling over 5,000 BTC since last week.
Davis pointed out that these sales should not ordinarily spark concerns, as they are not massive compared to Bitcoin’s daily volume. He stressed that the anticipation and news around these events often spark fear, not the events themselves.
While the German government still has a significant amount of Bitcoin to sell, the analyst noted it may take the government months to unload its Bitcoin. If it sells 1,500 Bitcoin weekly, it would take about 30 weeks to finish selling, which the market can easily absorb.
Davis highlighted these points to illustrate how the market tends to quickly forget positive news, such as Bitcoin purchases by ETFs and whales like Michael Saylor and instead focuses on bearish sentiment. His insights underscore the importance of maintaining perspective in the volatile crypto market, where fear often overshadows fundamental strength and long-term potential.
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