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On Wednesday, July 6, Mt. Gox Trustee announced that they would be repaying the creditors of the defunct cryptocurrency exchange. Toky-based Mt. Gox, once the biggest crypto exchange, suspended all trading and went offline back in February 2014.
It lost a total of 850,000 Bitcoin valued at $500 million. Eight years later, some of these Bitcoins have been recovered. The Trustee currently has access to 141,686 Bitcoins, some cash, and other Bitcoin Cash coins. The value of these accessible Bitcoins as of the current price is nearly $3 billion.
The Trustee has asked creditors online and also indicate how they would like to receive their repayment. However, the bigger question now is that as the creditors get their money, will they hold it or dump it in the open market.
When Mt. Gox went defunct in February 2014, Bitcoin (BTC) was trading around $600 levels. These BTC holders are already sitting at 36x profit as of the current price. There’s a very high possibility that the Mt. Gox creditors might dump the BTC in the open market. Speaking to Bloomberg, crypto investor Aaron Brown said:
“Some Mt. Gox creditors will get Bitcoin. Some will sell them. It won’t be a significant fraction of total Bitcoin trading volume, but it might push prices down. The decline might spook some other people and we might see a further drop.”
Why Bitcoin Will Continue to Stay Under Selling Pressure?
There’s been a brutal correction in Bitcoin and the overall crypto space during the last quarter. In Q2, 2022, Bitcoin value has been cut to half owing to several factors like worsening macros, Terra collapse, massive liquidations, crypto firm insolvencies, etc.
As a result, there’s been persistent selling pressure on Bitcoin. Furthermore, Bitcoin miners who hold massive quantities in their kitty have been offloading their BTC holdings to meet operation costs. Some major Bitcoin mining players still haven’t offloaded but are likely to do so in the future.
Bitcoin mining giant Marathon said that it currently holds more than 10,055 BTC and has not sold since October 2020. However, it added that as its Bitcoin production ramps up in near future, it might sell part of its holdings to meet operational costs.
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