For nearly as long as Bitcoin has been trading, its existence has been a thorn in the sides of crypto investors everywhere. And starting today, new investors in crypto may soon find out why veterans cringe when they hear the name: Mt. Gox.
Find out why the infamous, original crypto exchange could continue to be the bane of each Bitcoin bull run.
What Is Mt. Gox And What Does It Mean To Bitcoin?
Mt. Gox is short for “Magic: The Gathering Online eXchange,” according to Wikipedia. But when its creator Jed McCaleb became interested in Bitcoin, he turned it into a cryptocurrency exchange.
Without it, Bitcoin adoption might not have unfolded the way things have historically. Why then, are crypto investors suddenly so spooked about the long defunct platform?
Related Reading | Analyst: Bitcoin Parabolic Trend Is “Close To A Breakdown”
Word is spreading, stemming from Bloomberg’s Matt Leising, that Coinlab has reached a deal with Mt. Gox creditors in which original investors can claim up to 90% of the original BTC lost. The deal is subject to creditor approval, but it could lead to a portion of the original 140,000 BTC making its way into the market.
” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin could turn the tides on a the overall bull trend once again.
The effects of Mt. Gox over the years | Source: BTCUSD on TradingView.com
How The Early Exchange Has Crushed Each Major Crypto Rally
While the existence of the early exchange was vital to Bitcoin’s initial growth, it has been nothing but a thorn in its paw since. Mt. Gox has been responsible for nearly every major peak in the cryptocurrency’s history, dating back to 2013.
The first of which occurred when the crypto market was so hot, the exchange halted trading to force a market “cooldown.” Cool down it did, with a one-week candle from high to low seeing a full 80% retrace.
The next major peak happened when the troubles at Mt. Gox came to a head. The platform had been experiencing issues leading up to 2014, but it was February 2014 when withdrawals were halted.
The full details of the hack caused the first major » Read more
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market in the leading cryptocurrency by market cap. After taking three years to recover, Bitcoin finally crushed all expectations and emerged as a household name in 2017, topping out at $20,000.
It wasn’t until later in 2018 after subsequent selloffs, that blockchain data revealed that it was the trustee responsible for holding the Mt. Gox BTC selling into the market to cover off on costs and recoup funds.
Related Reading | The Striking Similarities Between The 2017 Bitcoin Peak And Now
The trustee began moving Bitcoin on December 18, the exact peak of the last bull market. The rest is history.
Bitcoin is back, and even doubled its 2017 peak. Will these early investors in crypto continue to hold for much higher prices? The highest price the cryptocurrency was trading at in 2013 and 2014 was under $1,200. That means even at today’s price of $35,000 and a 90% allocation, they’re still in over $30,000 profit per » Read more
” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin.
Even if every investor of some 100,000 BTC only sold half, that’s 50,000 BTC suddenly flooding the market. The trustee sold far less than that in 2017, and it took the cryptocurrency back down to $3,200 in the end. What sort of damage will this do to the market this time?
Featured image from Pixabay, Charts from TradingView.com
Bad guys can’t cash out their loot in 2016 Bitfinex hack
Assets stolen from Bitfinex crypto exchange in a hacking incident back in 2016 will take over a century to be cashed out, blockchain intelligence firm Elliptic said in its latest report.
On Thursday, the company published a statement about the infamous hack that resulted in Bitfinex losing 120,000 bitcoin (valued today at around $7 billion). It detailed nearly 80% of the illegally obtained funds are still in the hacker(s) wallet.
The remaining 21% have been moved around by the malicious cyber attackers that have only managed to launder 4% of their total haul, which is approximately $270 million.
A roadblock for the attackers
Elliptic pointed out that the reason for their thesis is the evolution of crypto tracking tools, regulations, and law enforcement methodologies that make stolen or ill-gotten digital assets very challenging to cash out today.
The intelligence company explained that the hackers used “peel-chains” to exchange the stolen funds. In this method, crypto tokens are moved around numerous times, moving fast from wallet to wallet, and only a small amount of the bitcoin is “peeled off to their actual destination along the way.”
Back then, it was extremely hard to track crypto-assets laundered using this method. But today, the emergence of automatic tracing systems capable of determining the ultimate source or funds in an address makes the job a lot easier for the authorities.
The hacker after the cyber attack
After the successful attack on Bitfinex in 2016, the laundering process started in 2017 through the largest darknet market that time – Alphabay. Later that year, it was shut down by law enforcement, prompting the move to Hydra – the biggest illegal marketplace today.
Cryptoslate cited part of the report from Elliptic, stating, “After a hiatus in 2019, the launderers returned to Hydra in 2020 and are currently depositing $3 million of the stolen bitcoin every month.”
According to the report, to date, there is now approximately $72 million worth of the stolen cryptocurrency sent to Hydra.
Image courtesy of Cointelegraph News/YouTube
Three reasons why Cardano is going on this price trajectory
Rising trade volume across spot and derivatives exchanges have supported Cardano’s ongoing price rally over the past few weeks and months. The altcoin, at the time of writing, was trading at the $2.32-level, with the crypto gaining by 20% in 24 hours to touch one ATH after the other. The aforementioned hike in price and trade volume were evidenced by the increase in market capitalization as well.
Thanks to the aforementioned factors, Cardano is now ranked third among the market’s top-10 altcoins, based on data from CoinMarketCap.
What’s more, based on the attached chart, currently there is more ADA staked than in the past 30 days. In fact, it is at nearly half a million. With 100% of its HODLers profitable at the press time price level, ADA’s rally is likely to be a long one, especially with the altcoin’s staking rewards data offering a similar conclusion. With a relatively high percentage of ADA staked, a direct relationship has emerged between staked ADA and ADA’s price.
While the current on-chain sentiment is slightly bearish, the net network growth stood at a positive 5%. Further, while there has been a slow drop in large transactions, that could mean that more retail traders are buying ADA v. HODLers and institutions. Unless trade volume drops and cascading sell-offs occur, the price is likely to hold at its current price level.
In the case of Cardano, the concentration by large HODLers has remained largely below 30% and this is key to its ongoing rally. Top memecoins and altcoins that are rallying like DOGE, LINK, BNB, and ETH, among others, have a high concentration by large traders. This is essential to supporting the price at its key levels.
$80 billion worth of large transactions have transpired over the past week and the inflows are anticipated to increase even more. Less than 15% HODLers have held ADA for over 12 months, despite YTD gains of over 500%. And, ADA’s HODLers are lower in numbers than expected. Ergo, the short-term ROI could be the key reason for the short HODLing duration.
Based on data from Messari, the ROI over the past week was nearly 40%.
In the past year, the ROI was over 700%. This is a relatively high gain for HODLers, despite several dips.
ADA’s latest developments and the increasing demand in the second phase of the altseason make it one of the hottest altcoins to buy and HODL. In fact, one can argue that ADA continues to remain undervalued at the press time price level.
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Data shows the ‘Bitcoin price drops ahead of CME expiries’ claim is a myth
Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date.
However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021.
Some investors and traders have pointed out that Bitcoin’s incredible rally after the recent futures and options expiry dates has become a trend.
$BTC options expiry in about 8 hours…
Last Friday of every month has been a pretty good entry point for past 8 months …
Past 3 months price has been hammered in the hours / days leading up to expiry
Observation not advice. Let’s see if the pattern holds. pic.twitter.com/3CJqI6m6jl
— 阿龍 (@KnutsonJesse) April 23, 2021
BTC has effectively rallied in the days following the expiry, but expanding this analysis uncovers a less-than-satisfactory trend.
Three consecutive events don’t prove a trend
The past 13 months have been nothing short of spectacular for Bitcoin, as the cryptocurrency posted 788% gains. August 2020 turned out to be the worst month, as BTC presented a 7.5% negative performance. Thus, choosing random starting points within the month will likely show a similar positive trend.
For example, if one uses the “last quarter” moon phase as a proxy, the odds that a rally takes place after each event are very high.
As depicted above, indeed, Bitcoin rallied after five out of the last six instances. The only conclusion might be that positive trends are the norm rather than the exception during bull runs.
Although there might be some explanation to the reason behind Bitcoin’s end-of-the-month underperformance, these are only hypotheses.
While market makers and arbitrage desks could benefit from suppressing the price after a rally, other forces, including leverage futures longs and call option holders, would balance that out.
Bitcoin price did not drop in three of the last seven expiries
Therefore, it makes sense to analyze the potential price suppression ahead of the expiry instead of looking for explanations for a rally during a bull market.
Both October and December 2020 expiries failed to present any negative pressure ahead of such dates. Meanwhile, the 12% positive performance on the five days that preceded the most recent April 30 expiry also puts a big question mark on how meaningful the CME event really is.
Considering there hasn’t been a price decrease ahead of monthly futures and options expiries in three of the last seven instances, this evidence should put a nail in the coffin of the unfounded myth.
As mentioned earlier, trying to develop theories on why sellers acted more aggressively on specific dates is unlikely to yield results.
As shown above, Bitcoin’s price failed to underperform in three out of the last seven expiries. A 57% success rate should not define a trend when a positive performance after a specific date has been proven common during a bull run.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.