Bitcoin’s Notorious Whale Confirms Fire-Sale

Bitcoin’s notorious ‘Tokyo Whale’ offloaded hundreds of millions worth of BTC over a three-month period, highlighting once again the impact of fat hands on a nascent market. The liquidation period was between Mar. 7 and June 22 – a three-and-a-half-month stretch with a peak-to-trough of roughly $9,900-$5,755 for the bitcoin price.

Tokyo Whale

On behalf of Mt Gox creditors, Tokyo’s Nobuaki Kobayashi sold approximately 24,658 BTC and 25,331 BCH between the creditors’ last meeting and the date of the court ruling. That ruling, on June 22, allowed the estate to exit bankruptcy and enter civil rehabilitation.

The sale earned creditors nearly 26 billion yen, or $230 million U.S. On average, bitcoin sold for about $8,100, which is 26% higher than today’s prices. Bitcoin cash yielded an average sale of $1,190, which is nearly three times higher than current prices.

In documents that appeared on CCN, Kobayashi said the bankruptcy trustee “has already secured a suitable amount of money to secure the interests that are expected to have obtained by BTC creditors under the Bankruptcy Proceedings in connection with BTC claims to be treated as non-monetary claims under the Civil Rehabilitation Proceedings.”

In April and May, more than 24,000 units of BTC and BCH were moved out of wallets thought to be associated with Mt Gox trustee in at least two separate incidents reported by Hacked and CCN. It is now safe to assume that the transfer was part of the liquidation undertaken by Kobayashi on behalf of the creditors.

For whale watchers, the good news is Kobayashi is not planning any additional fire sales now that Mt Gox has entered civil rehabilitation. Previously, he was prepared to offload billions more in cryptocurrency holdings.

Bitcoin whales are partly to blame for the yearlong downtrend in market prices. Several mysterious price collapses, including one earlier this month, have been traced back to a few wallet addresses transferring large sums of coin to virtual exchanges. As Hacked previously reported, a whale moved 110,000 units of BTC and BCH from multiple wallets during the month of August. Roughly 14% of the total made its way to Bitfinex and Binance, where they may have been liquidated.

BTC/USD Update

It didn’t take whales to sink bitcoin on Tuesday. The leading digital currency was retreating in lockstep with the broader market as last week’s sharp rally continued to fizzle. At press time, BTC was down 2.4% on Bitfinex to trade at $6,425. The downfall pushed prices below the 50-day moving average, a critical short-term inflection point.

Bitcoin’s daily trade volumes amounted to $4.4 billion, which is above the minimum threshold observed in past rallies. But even with Tuesday’s loss, bitcoin made off with 53.6% of the overall market capitalization for cryptocurrencies. Bitcoin’s dominance rate fell below 52% last week as XRP, XLM added billions to their respective market caps.

Based on current price trends, bitcoin is unlikely to test recent highs anytime soon. BTC remains firmly entrenched in a long-term bear market, with consecutive rally attempts fading out at or above the $7,000 hurdle. This psychological threshold has proved highly elusive in recent months.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi