The Mt. Gox Factor – Chung’s Weekly Digest (7/11)

Fear of sell pressure from Mt. Gox’s release of $3 billion worth of $BTC might be the black swan event that marks the bottom.

Massive Sell-Off in the Cards

Bitcoin ($BTC) might be faced with an unprecedented event of capitulation as the payout from the Mt. Gox hack will flood the market with approximately 140,000 Bitcoins worth nearly $3 billion in total.

Source: The payout from the Mt. Gox rehabilitation plan is expected to flood the market with $BTC as some of its creditors are ready to cash in on their profits.

In an announcement titled “Information on Repayment Procedures” released by Rehabilitation Trustee Nobuaki Kobayashi dated July 6, repayment is expected to take place in the month of August this year. 

The document released by Kobayashi contains the following:  

“Following discussions with the Court and in accordance with the Rehabilitation Plan, the Rehabilitation Trustee plans to set the Assignment, etc. Restriction Reference Period from approximately the end of August this year until all or part of the repayments made as initial repayments is completed for safe and secure Repayments.”

The $BTC expected to be released from the rehabilitation program represents 0.72% of Bitcoin’s total supply. Independent analyst Miles Deutscher gives an account of the Mt. Gox incident in a Twitter thread. 

Bitcoin and the overall crypto market will have to brace for more volatility in the coming months. Crypto assets have been faced with extreme volatility since their inception, and this time around, downward motion of the market cycle has been accelerated by the $LUNA/$UST crash. 

The U.S. Department of the Treasury finally released its fact sheet titled “Framework for International Engagement on Digital Assets” on July 7. It calls for international engagement but does little to shed light on the treatment of crypto assets. It also failed to identify how the U.S. government can regulate crypto assets. 

It is evident that the U.S. Department of Treasury is not in favor of facilitating a quick resolution to the plights of crypto-based institutions operating in the U.S.

Source: Bitcoin is forming a descending channel in the daily and weekly charts. A descending channel typically has a bullish bias.

Weekly Recap

Binance’s signs MOU with Cambodia. 

PancakeSwap introduces Zap to make liquidity provisioning easier for all.

Developers are proposing to make crypto more accessible to all. 

SecondLive introduces Outfit NFT Mystery Box campaign with BNB Chain.

Hacker steals 1 billion people’s data and sells it for $200K. 

Venus Protocol brings out its Tokenomics 4.0 proposal.’s CEO talks about the importance of scaling

Binance strengthens user verification after China’s recent data hack.  

Web3Auth aims to eliminate the use of seed phrases.

Floki Inu updates its 2022 roadmap

VIP customers get new privileges on Binance. 

BiSwap offers huge summer benefits

Binance secures another license in Spain. 

Trading volume on Binance crosses $9 billion. 

Market Sentiment


Bitcoin’s total market cap has dropped below $400 billion and it appears poised to test new bottoms as the macro economy continues to look bleak.

Source: Capitulation is still taking place as long-term holders are selling way below their breakeven price

The crypto bear market is an opportunity to accumulate. The perception of crypto assets is fast changing and in the next market cycle, it is possible to expect exponential gains that are more bullish as retail investors will be flooding the market en masse.

Source: Some crypto analysts are already calling in the bottom as the Bitcoin chart reflects the 2020 Covid crash

Bitcoin miners are facing a tough time and would likely sell their $BTC reserves to sustain operation costs. Some miners may have to make the decision to cease operation as mining has turned unprofitable. 

Coins to Watch

Solana ($SOL) – One of the fastest smart contract platforms in the space that is both affordable and scalable.

Solana continues to take efforts by implementing upgrades to resolve its congestion issue which often leads to outages. 

Solana also took steps to release its own Web3 mobile phone to make crypto and Web3 accessible to the general public.

  • Solana continues on its drive to remain competitive. Its current price of $35.84 at the time of writing is a bargain in the long run. 
  • Chainlink ($LINK) – Chainlink is providing an oracle service that is way ahead of its competitors. 

Chainlink has been constantly building. Many projects, regardless of the chain that they are built on, rely on Chainlink for a trustless and decentralized oracle solution.

Chainlink is an indispensable service for any Web3 based application. 

$LINK has the fundamentals to be in the top-10 crypto assets by market cap. 

Serum ($SRM) – Serum is a Decentralized Finance (DeFi) protocol built on the Solana network. It is both scalable and cost-effective.   

If Solana is able to increase its adoption, automatically Serum will be one of the beneficiaries because it is designed to morrow traditional finances but with all the benefits of the blockchain technology.

Serum allows for cross-chain swaps but has suffered tremendously during this bear cycle. 

Serum has $270 million in Total Value Locked (TVL), but held $1.88 in TVL during the market cycle top. 


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