News that a powerful bitcoin holder, “Tokyo Whale”, is taking a break from selling is adding to the bullish case for the digital currency.
According to the details of a sale published last week, a company trustee of the now defunct Tokyo bitcoin exchange Mt. Gox revealed that more than 35,000 bitcoin (worth $400million at that time) were sold to pay off creditors.
Mt. Gox closed in 2014 and filed for bankruptcy following the theft of 850,000 bitcoin. So as to liquidate the exchange’s remaining 166,000 bitcoin, worth approximately $1.6 billion at Monday’s prices, Nobuaki Kobayashi, lawyer and trustee of said company said he still needs regulatory approval.
Some reports and information from Twitter users suggest that the next court hearing won’t happen until September 2018.
According to Brian Kelly, “It’s still hanging over but now we’ve got six months or so before that’s an issue,” He added that “in terms of the Tokyo Whale it’s a supply issue, but it’s also a sentiment issue”
Bitcoin prices recovered briefly this week. Bitcoin rose to 6.96% from Friday close to a high of $9,885.22 on Monday, based on data from Coindesk’s bitcoin price index. Later, prices fell to $9,241.17 as of 12:40 p.m ET Monday.
Bitcoin’s price fell below $10,000 and lost close to 18% of its value in the last two days last week after news of increased regulatory inspections of cryptocurrency exchanges last week.
Bitcoin’s one-week performance
To pay back creditors, Kobayashi reportedly sold off 35,841 Bitcoin and 34, 008 Bitcoin cash on behalf of the company since September last year. This could have contributed to the recent fall of bitcoin prices, Kelly said.
“It’s down 70 percent from top but at some point you run out of sellers,” Kelly said. “It looks as though the market’s trying to bottom out.”
Although the Mt. Gox selling appears to be on hold for now, other roadblocks lay ahead for bitcoin.
A major Hong Kong-based exchange was reported to have compromised its accounts, the U.S. Securities and Exchange Commission is allegedly expanding its scrutiny on cryptocurrency exchanges and more news from Japanese regulators only add to intensify feelings of doubt within investors.
According to Jack Tatar, managing partner at Doyle Capital Management “This is just one factor that’s impacting bitcoin at this point” he also added that Mt. Gox has “impacted the entire market”, and it’s too soon to say that whether “bitcoin will rise in price”.