Nearly a decade after its infamous collapse due to a major hack, the embattled bitcoin exchange Mt. Gox is set to commence the long-awaited return of bitcoin (BTCUSD) to its former customers starting July 2024.
Estimates vary on the amount of bitcoin to be distributed, ranging from 65,000 to potentially 140,000 BTC, based on addresses linked to Mt. Gox. At the upper end, this could represent a substantial sum nearing $9 billion, raising concerns among bitcoin investors about potential price depreciation. Bitcoin slid below $61,000 on Monday amidst broader market trends.
Mt. Gox, once a dominant player in the bitcoin trading arena, suffered multiple hacking incidents between 2011 and 2014, resulting in the disappearance of thousands of bitcoins and triggering a protracted process for customers seeking restitution. The exchange declared bankruptcy in 2014, setting off years of legal and financial maneuvering to recover and distribute remaining assets.
Preparations for the repayment process are currently underway, as affirmed by Rehabilitation Trustee Nobuaki Kobayashi, who emphasized the implementation of rigorous safety measures to safeguard the distribution.
In addition to bitcoin, former Mt. Gox customers will also receive Bitcoin Cash, a cryptocurrency that emerged from a “hard fork” of bitcoin in 2017. This development follows a notable transfer of over 140,000 bitcoin from cold wallets to an undisclosed address in May, marking the first movement of funds in five years.
Concerns among crypto investors center around the potential selling pressure these repayments might exert on both bitcoin and Bitcoin Cash markets. Some analysts fear a significant impact akin to the negation of substantial ETF inflows, potentially affecting market dynamics given the accumulated interest in bitcoin through various financial products.
However, perspectives vary on the actual impact. While early investors may consider liquidating portions of their holdings due to substantial value appreciation since their initial investments, Alistair Milne, CIO of Altana Digital Currency Fund, suggests that any significant distress selling has likely already occurred over the past decade.
As Mt. Gox prepares to reimburse long-waiting creditors, the crypto market braces for potential volatility, reflecting both caution and anticipation among stakeholders awaiting the resolution of this pivotal chapter in bitcoin’s history.
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