Mt. Gox is at it again. As of yesterday, the still-bankrupt crypto-exchange that effectively pioneered the space, reportedly moved $144 million worth of Bitcoin, between two wallets.
Of course, rumors seem to abound already as to what effect this move will have on the cryptocurrency market. The original report was made at 6:26 PM, UK time and as of 9:36 UK time, most of the market, including Bitcoin, was still in the green.
One reason for this might be the fact that none of the Bitcoin has been sold as of yet. The last time that Mt. Gox made such a move was between September 2017 and March 2018, when its bankruptcy trustee, who is in charge of clearing its debts, reportedly made the same transfer and then offloaded $400 million worth of Bitcoin and Bitcoin Cash.
In addition to this move, it should also be remembered that in March, the same bankruptcy trustee announced that he had roughly another $1.9 billion to get rid of. While this $144 million could be a part of this, it’s really only a drop in an ocean.
With this in mind, the argument could be made for more stablecoins. If you don’t already know, a stablecoin is a cryptocurrency that is pegged to the value of a US dollar or another relatively stable currency like the Euro. In this way, it uses collateral and a relative level of liquidity as well as certain algorithms to maintain a relatively constant value.
If you want a good example of this, look no further than Maker Dao’s, Dai coin, which seems to consistently stay between 99 cents and a dollar in value. Dai currently uses a pool of Ether as its collateral though it plans to be backed by multiple currencies in the near future.
Overall, the general idea behind such coins is that a crypto-investor can stabilize his or her portfolio with them to account for the high volatility of more well-known cryptocurrencies like Bitcoin and Ethereum. Just like in traditional investing, diversification is key. Your overall risk is lower when you have a high percentage of investments that can be considered stable.
Perhaps, if those who have gone deep into Bitcoin were to do the same, then there would be less of an uproar over every major, “dip,” in the market.
By: BGN Editorial Staff