Markets
Bitcoin Crashes as Mt. Gox Refund Rocks Crypto Market
Key points
- Bitcoin fell along with cryptocurrency-related stocks on Friday, with the leading cryptocurrency recently trading at its lowest level in months.
- Mt. Gox bankruptcy trustee begins repaying creditors, sending cryptocurrency market into crisis.
- Mt. Gox, once the world’s largest bitcoin exchange, collapsed following a hack in 2014.
- The news weighed on shares of Coinbase Global and MicroStrategy, while ether fell alongside bitcoin.
Prices of major cryptocurrencies, as well as shares of Coinbase Global (CURRENCY) and MicroStrategy (MSTR), plummeted on Friday as troubled cryptocurrency site Mt. Gox began repaying creditors.
Nobuaki Kobayashi, the receiver of the Mt. Gox bankruptcy estate, said the estate “has made repayments in Bitcoin and Bitcoin Cash to certain of the rehabilitation creditors through a portion of the designated cryptocurrency exchanges etc. in accordance with the rehabilitation plan.”
He noted that other creditors will be repaid “promptly” when certain conditions are met, including that they can be repaid “in a safe and secure manner.”
Bitcoin (Currency Exchange) was trading around $55,700, down about 2.4%, as of 10:45 a.m. ET on Friday. Ether was down about 3.4%.
The 2014 Mt. Gox hack resulted in an estimated loss of 740,000 Bitcoins
Mount Gox was once the world’s largest cryptocurrency exchange, at one point handling 70% of bitcoin transactions. A 2014 hack that resulted in the loss of approximately 740,000 bitcoins led to the company’s demise.
Anticipation of the Mt. Gox news, which Kobayashi had reported last month would happen in July, had already begun to shake up the cryptocurrency market. Today’s announcement sent Bitcoin to its lowest level in five months.
The impact was also felt by Coinbase, which said it had $935 million in customer cryptocurrency trading revenue in the first quarter, double what it had in the fourth quarter. MicroStrategy said in its first-quarter financial report that it held 214,400 bitcoins.
Coinbase shares were down about 5% at $213.87 as of 10:45 a.m. ET on Friday, while MicroStrategy was down more than 6% at $1,220.11. However, Coinbase and MicroStrategy shares are up about 23% and 93% since the beginning of the year.