Summary:
- Creditors of Mt. Gox could soon get repaid in Bitcoin for their 2014 losses when the exchange was hacked.
- Mt. Gox’s bankruptcy trustee currently holds 141,686 Bitcoin.
- The distribution and potential selling of the Bitcoin by creditors could slow BTC’s recovery in the crypto markets.
Creditors of the non-functioning crypto exchange Mt. Gox could soon receive repayments on their Bitcoin held by the platform’s trustee since the 2014 hacking incident.
According to a report by Bloomberg, Mt. Gox’s Japanese bankruptcy trustee sent out a letter on July 6th requesting creditors to register online and provide information on how they will want to receive their repayments.
The trustee is known to hold an estimated 141,886 Bitcoin, hard cash, and Bitcoin Cash coins as a result of the August 2017 fork. The Bitcoin stash alone is worth over $3 billion using BTC’s current rate at $21,300.
Mt. Gox Creditors Could Increase Bitcoin Selling Pressure.
The report by Bloomberg explains that some Mt. Gox creditors will most likely sell their Bitcoin into a market that is already struggling to recover from the ongoing drawdown and the side effects of the LUNA/UST collapse. It explains:
Once the coins are sold, that could affect Bitcoin prices, which have slid sharply in recent months amid the Terra blockchain collapse and crypto companies such as hedge fund Three Arrows Capital filing for bankruptcy.
Crypto traders and investors have labeled the potential selling of Bitcoin by Mt. Gox creditors as a possible ‘black swan’ event that could drive the price of BTC lower.
In an analysis shared on Twitter, crypto analyst Miles Deutscher summarized the anxiety surrounding the event through the following statement.
Creditors have the option of receiving USD, $BTC or $BCH.
It’s estimated that creditors will start receiving funds as early as August.
Many people are panicking that the release of these funds will lead to a huge supply-dump, which could significantly impact the $BTC price.
Some Mt. Gox Creditors Will Not Sell their Bitcoin.
However, he pointed out that the likelihood of synchronized selling is probably low given that some creditors will opt to hold their Bitcoin given that BTC has proven itself over the years since the 2014 hack. He explained:
The biggest argument for creditors not selling is psychological:
They were forced to hold an asset for many years and have seen massive returns. $BTC is so much more “proven” as an asset now than it was at the time of purchase.
It’s unlikely the majority choose to sell.
Knowing About Probable Selling by Mt. Gox Creditors Ahead of Time Might Prevent Market Panic.
However, Mt. Gox’s creditors selling their Bitcoin might not cause as much panic in the crypto markets, given that traders already know it could happen ahead of time.
This is the opposite of how previous selling, such as the Coronavirus Crash of March 2020 and the most recent one catalyzed by LUNA’s collapse, caught the entire crypto-verse by surprise.
Source: Read Full Article