Bitcoin is trading below $20,000 right now, which under normal circumstances would be a great opportunity to dollar cost-average in and scoop up more.
If this were any other time, any other dip, I’d be buying big – and I’d be screaming for everyone to do the same thing.
But this isn’t just “any” time, and I don’t think the selling that’s taken us from above $24,000 to $19,800 in three weeks is finished.
Why? It all comes down to two words: Mt. Gox.
Here’s what you need to know about what’s happening…
This Crypto Story Has Taken Nearly Nine Years to Play Out
If you’re just starting to build a Bitcoin position or you’re just getting into crypto, you might not even know what Mt. Gox is – or “was,” more to the point. It’s been eight years since Mt. Gox was on radar screens.
It was definitely on radar screens; Mt. Gox was a big deal at the time. By 2014 the Japan-based exchange was handling more than two-thirds of all crypto transactions on Earth.
Then in that February it was knocked over like a 2 AM liquor store. The exchange lost around BTC 750,000 of its customers’ bitcoins, and around BTC 100,000 of its own. At the time, this was something like 7% of all circulating Bitcoins, and even in those days the haul was worth $473 million, or nearly $16.9 billion at today’s prices.
The CEO at the time, Mark Karpelès, said “technical problems” enabled “fraudulent withdrawals,” and, to this day, that’s the official story. For what it’s worth, the Justice Department alleges rogue exchange operator Alexander Vinnik (who’s now in custody) is connected in some way to the Mt. Gox heist.
But the story certainly doesn’t end there.
Because, in the eight-odd years since, around BTC 142,000 of that BTC 850,00 haul has been found out there in the wild, and Mt. Gox’s users-turned-creditors have a strong claim on that crypto.
The Japanese courts agree, and an administrator is due to release those 142,000 Bitcoins any day now to creditors. The key word there is “due.”
The hell of it is, that might or might not happen. Those funds could be released this week, or next month, or next year – only the people administering the Mt. Gox bankruptcy know for sure, and they ain’t sayin’.
It’s that “will they? won’t they?” uncertainty, and uncertainty over what those creditors plan to do with those Bitcoins that’s got me uneasy about the picture right now.
Some of these folks are hardcore. They’re HODLing. They’ll pocket those Bitcoins and they’ll never see the light of day again.
But some of those folks have a Bitcoin buy-in price of less than $300 and, at the risk of sounding like a broken record, Bitcoin’s trading above $19,800 right now. That’d be a 6,500% profit if you were of a mind to sell. That’s a big payday, and it could prove irresistible to some investors.
So until we get answers – one way or another – I’m freezing my Bitcoin DCA, and I suggest you do the same. As digital asset investors, we tackle volatility, but moving now would be basically surrendering to volatility.
The way to make money on Bitcoin right now is by trading it. We’re doing just that over at Digital Heavyweights – you can find out more here.