The Downfall of Mt. Gox: How Bitcoin Cash Played a Key Role
Cryptocurrency has seen its fair share of ups and downs, with one of the most infamous collapses being that of Mt. Gox. Once a titan in the world of Bitcoin exchanges, Mt. Gox faced bankruptcy in 2014 following a massive hack that saw hundreds of thousands of Bitcoins disappear. However, a new perspective has emerged on the Mt. Gox saga, with experts now pointing to Bitcoin Cash, rather than Bitcoin, as a significant player in the exchange’s demise. In this piece, we explore the downfall of Mt. Gox and shed light on the impact of Bitcoin Cash in the collapse of this once-dominant platform.
Mt. Gox’s Chapter Redemptions and Their Impact on Bitcoin Cash
Recent developments suggest that the chapter redemptions by Mt. Gox are not as detrimental to Bitcoin (BTC) as previously feared. Instead, the real impact seems to be on Bitcoin Cash (BCH), according to Peter Chung, Head of Research at Presto Labs. Mt. Gox is set to return $73 million worth of BCH to its former customers, representing over 20% of the token’s daily trading volume.
The Fear of Selling Pressure on Bitcoin Cash
Concerns have arisen that the selling pressure resulting from Mt. Gox’s chapter redemptions could drive down the value of Bitcoin (BTC). While these fears may be unfounded, they do raise valid concerns for Bitcoin Cash (BCH). Chung’s analysis indicates that the selling pressure on BCH could be four times greater than that on BTC, with the redemption amounting to approximately 24% of BCH’s daily trading volume, compared to just 6% for BTC.
The Future Outlook for Bitcoin Cash
Chung predicts that many traders will treat the BCH redemption as an airdrop and immediately sell their holdings. This is due to the fact that Bitcoin Cash’s fork occurred three years after Mt. Gox’s bankruptcy, leading collectors to be less attached to BCH. Chung recommends a strategy of pairing long BTC perpetuals with short BCH perpetuals to navigate this situation effectively.
Looking Ahead
As the cryptocurrency market continues to evolve, it remains to be seen how the redemption of BCH by Mt. Gox will impact both Bitcoin and Bitcoin Cash. With BCH currently trading at $360, down 3.8%, the market is in a state of flux. However, investors can take steps to mitigate risk and capitalize on opportunities in this changing landscape.
