Mt.Gox Repayments Trigger $190M Loss for Long Crypto Traders

• Market Decline Triggered by High Funding Rates and Crypto Exchange Activities
• Impact on Futures Market
• Trading Losses for Specific Cryptocurrencies
• Recent Trends in Liquidations
• Mt. Gox Begins Repayment of Lost Bitcoin

Market Decline Triggered by High Funding Rates and Crypto Exchange Activities

The cryptocurrency market has experienced a significant decline in the past day, largely due to high funding rates, relatively low liquidity, and reports of the infamous crypto exchange, Mt.Gox, initiating repayments to victims of its 2014 hack. This has resulted in substantial losses for leveraged bullish traders.

Impact on Futures Market

Within the futures market, traders who placed bets on rising prices suffered losses amounting to over $190 million due to liquidations. This was observed when Bitcoin$42,260 -0.64% (BTC) fell up to 4% before experiencing a recovery in the early hours of Wednesday. Surprisingly, altcoin-tracked futures accounted for $45 million of these losses, with Bitcoin liquidations making up a comparably smaller portion at $36 million.

Trading Losses for Specific Cryptocurrencies

Traders dealing in Solana$104 5.03%'s SOL tokens experienced nearly $20 million in losses, and those trading in Bitcoin protocol Ordinals (ORDI) experienced losses nearing $8 million, according to data provided by Coinglass. Binance, a cryptocurrency exchange, witnessed over $97 million in liquidations, the highest among any counterparties.

Recent Trends in Liquidations

The liquidations mentioned above are the highest in recent weeks, following a nearly $500 million wipeout early in December. Liquidations take place when an exchange forcefully closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position, meaning they do not have adequate funds to keep the trade open.

Mt. Gox Begins Repayment of Lost Bitcoin

The recent market downturn coincides with the Mt. Gox crypto exchange reportedly starting to repay customers who lost 850,000 bitcoin (BTC), currently valued at approximately $36 billion. Reports indicate that some participants of the mtgoxinsolvency subreddit group have received repayments in yen via Paypal. However, others who opted to receive repayments into bank accounts have not reported any inflows.

Edited by Jonathan Stoker