Bitcoin Hits $65K, Ignoring Mt. Gox Worries; XRP Leads Crypto Surge
The crypto market continued its rebound last week, with Bitcoin (BTC) reaching its highest price in four weeks on Tuesday, surpassing $65,000 for the first time since late June. This surge came despite earlier dips below $63,000, driven by the movement of $2.8 billion worth of BTC from wallets related to the defunct Mt. Gox exchange. These funds are likely being prepared for distribution to creditors in the coming days.
The rally wasn't limited to Bitcoin. The CoinDesk 20 index (CD20), a market benchmark, gained nearly 3% in the past 24 hours with 16 of its 20 constituents in the green.
XRP (XRP), the native token of the XRP Ledger payment network, was the standout performer, surging 9% on Tuesday and extending its weekly gains to 35%. This rally was fueled by large asset holders (whales) increasing their holdings, a sign of confidence in higher prices. Additionally, traditional derivatives trading powerhouses CME and CF Benchmarks announced indices and reference rates for XRP, which could boost institutional adoption.
Mt. Gox Sell Pressure 'Overestimated'?
With Germany's BTC sales already completed, investors are wondering how much of the $9 billion worth of Bitcoin about to be distributed to Mt. Gox creditors will be dumped on the market. Ki Young Ju, CEO of crypto analytics firm CryptoQuant, argues that fears of a sell-off are 'overestimated' and won't derail the current crypto rally. He explained that unlike the German government, Mt. Gox creditors aren't forced to sell, making it less likely to be a pure sell-side liquidity event.
Alex Krüger, a well-followed crypto and macro analyst, estimates a maximum 10% price drop for Bitcoin if creditors dump their assets en masse. CoinMetrics, a crypto data provider, also suggests that the market can absorb the liquidations if they happen gradually and over multiple weeks, given Bitcoin's current market depth and trading volume.
Conclusion
The crypto market's current strength and the potential for orderly distribution of Mt. Gox assets suggest that a significant sell-off is unlikely. The market's maturity and depth, combined with the positive sentiment surrounding Bitcoin and XRP, point towards continued growth in the near future.
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