Tokyo Whale’s Impact to BTC: Heading to a Deep, Deep Plunge
By: Max Neuhaus
Tags: Nobuakikobayashi, Btc, Bitcoin, Tokyowhale, Eth

On March 8, the crypto market has experienced a temporary relief from the continued plummet of Bitcoin (BTC) and other crypto currencies. This came after Nobuaki Kobayashi or the “Tokyo Whale” has announced that he won’t be selling off his remaining Mt. Gox Bitcoin until September.

Kobayashi is selling his Bitcoins to pay off his debts.

Then came the bad news: Kobayashi has again resumed his selling spree and quickly grabbed the headlines along with other market developments that plunged BTC to as low as $7,676 on early Thursday, March 15, before bouncing to a slight recovery above $8,000 a few hours after.

Aside from BTC, other alt coins were in the tank in the past 24 hours. Ethereum (ETH) followed suit by plunging more than 15% at $574, and Ripple at a devastating 17% at $0.65.

A History of Mt. Gox

The Japan-based crypto exchange, Mt. Gox (or short of Magic: The Gathering Online eXchange), used to be the largest BTC intermediary that managed more than 70% of the total global BTC transactions. It filed for bankruptcy protection in 2014 when it fell victim to a massive hack that wiped out 740,000 Bitcoins worth €460 million at that time. A total of 850,000 were also found missing but the company recovered 650,000 of them.

Mt. Gox employed a number of security measures right after the attack. The timing couldn’t be any more perfect as the public developed a massive interest in Bitcoin in 2013.

Continued woes also hunted the exchange when it was sued by its former partner, Coinlab, after Mt. Gox allegedly breached a contract that would allow Coinlab to manage their American customers. The U.S. Department of Homeland Security also investigated Mt. Gox’s lack of license to operate, which resulted to forcibly taking $5 million from the company’s accounts.

Adding to the panic was the resignation of Mt. Gox CEO Mark Karpeles or who’s more popularly known as “MagicalTux” in the online community (who reportedly left with Bitcoins worth $2 billion). Karpeles is facing accusations of embezzlement, which he categorically denies.

Then came the final blow. On February 24, 2014, its website was already returning a blank page. Investors were alarmed at what was happening. It turned out that the hacking hasn’t ended and more than 700,000 Bitcoins were again stolen. A total of 92% of the coins remain unaccounted for.

Kobayashi and BTC Dump

Nobuaki Kobayashi is a Japanese lawyer who worked at Mt. Gox as a trustee. On March 7, he confirmed reports that he sold $450 million worth of Bitcoins since the end of 2017. The decision was based, according to Kobayashi, on the company’s responsibility to pay off its creditors who were affected by the bankruptcy.

This resulted in a three-month downtrend in the market after he sold large amounts of Bitcoin and Bitcoin Cash (BCC) on two public exchanges from December to February (although some analysts are still skeptical about the extent of the sell-off’s impact).

The liquidation allegedly caused Bitcoin’s price to drop from its peak of $19,783 in December to $8,000 as of this press. Analysts are expecting the market to regain its balance by September when all Mt. Gox Bitcoins are sold.

Other Bearish Factors

Investors and analysts also cited a host of other influences in the market that continue to push down prices. Regulators are taking a tougher stance against ICO scams after reports of another fraudulent ICO, Giza, failed to fulfill its delivery of a product that was supposedly effective at storing cryptocurrencies securely. Many of its investors became suspicious after it stopped communicating with them and 2,100 ETH coins are reportedly missing.

In addition, Google’s recent announcement banning all forms of advertising related to cryptocurrencies, ICOs and hot wallets and trading recommendations on its platform had dampened investor sentiment. The U.S. Commodity Futures Trading Commission (CFTC) is also heightening its campaign against crypto companies along with the Bank of England and the Japanese government. Global finance ministers and central bankers are discussing cryptocurrency regulations in Argentina this weekend.

It is estimated that the recent plunge of BTC is worth $60 billion, which was lost in just 24 hours.

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