Bitcoin price has plunged to a five-month low, dropping below $55,000 as Mt. Gox, the defunct exchange, has officially commenced repaying creditors.
The Rehabilitation Trustee of Mt. Gox announced on July 5 that creditors will begin receiving repayments through designated crypto exchanges as part of the rehabilitation plan. To be eligible for prompt repayments, creditors must meet specific conditions, such as confirming the validity of their registered accounts and completing discussions with the trustee.
The confirmation of creditor repayments came after Mt. Gox made significant movements of Bitcoin, totaling 47,228.7 BTC, valued at $2.71 billion, to a new wallet. Some of the assets, including 1,545 BTC worth $85 million, were transferred to a wallet connected to the Bitbank exchange.
This news has been welcomed by the crypto community as it marks the end of a decade-long wait for Mt. Gox’s creditors to receive their digital assets. The exchange suffered a massive hack in 2014, losing 850,000 Bitcoin, which is now valued at over $57 billion. Mt. Gox filed for bankruptcy and began rehabilitation proceedings in 2018 to compensate creditors.
Following the Mt. Gox repayment announcement, Bitcoin’s price tumbled by more than 7.2% to $54,209, marking the first time the asset has fallen below $55,000 since February 2024. This decline triggered one of the largest liquidation events in the crypto industry this year, with traders speculating on digital asset prices losing over $675 million in the past 24 hours.
Long traders expecting price increases suffered losses of approximately $578 million, while short traders lost $98 million. Bitcoin traders were hit the hardest, with over $225 million liquidated, while Ethereum traders saw around $167 million in liquidations. Bitcoin Cash, another digital asset linked to the Mt. Gox repayment, also experienced approximately $3.8 million in liquidations.
