Mt. Gox News: The collapsed exchange has initiated repayments to its creditors with Bitcoin (BTC) and Bitcoin Cash (BCH), marking a significant step forward in the long-awaited compensation process. As of July 16, 2024, Nobuaki Kobayashi, the Rehabilitation Trustee, has successfully disbursed payments to over 13,000 creditors out of approximately 20,000. This highlights substantial progress since its collapse but also raises concerns of an impending selloff.
According to the latest news update, the last round of Mt. Gox repayments totaled 95,869.97 BTC valued at approximately $6.06 billion. Earlier in the day, Mt. Gox’s cold wallets transferred substantial sums. These included 48,641 BTC and 43,114.4 BTC, to new addresses.
Moreover, these transactions coincided with significant market reactions, including a sharp decline in Bitcoin’s value to $62,000 level. In addition, BTC also noted $210 million worth of liquidations. Moreover, Arkham Intelligence reported that these massive Bitcoin transfers triggered fears of widespread sell-offs.
It raised speculations of a sell spree akin to recent events such as the German government‘s $3.5 billion Bitcoin liquidation. Earlier, analysts from Cycle Capital cautioned that the manner in which Mt. Gox manages these assets will influence market stability. They expected Bitcoin to remain steady if Mt. Gox decides to disburse the payments through two or three months.
However, since the defunct exchange has affirmed payouts by July end, netizens are worried about a significant pullback in Bitcoin and BCH prices. Kraken, a prominent cryptocurrency exchange, confirmed receiving Bitcoin and Bitcoin Cash from Mt. Gox’s trustee. Moreover, it expects to complete transfers to creditors within 7-14 days.
Also Read: Bitcoin Falls As Mt. Gox Transfers $6B In BTC, $210M Liquidated
Despite concerns over immediate sell-offs, Bitcoin evangelist Samson Mow provided a contrasting view. He suggested that only about 20% of the distributed Bitcoin might enter the market immediately. Moreover, he expects that the remainder will likely be moved to cold storage or being used as collateral.
Market reactions were evident, with Bitcoin briefly dipping below $62,000 before rebounding close to the $64,000 mark. In line with Mow’s expectations, the BTC price showed resilience. However, since the repayment news was announced, analysts cautioned that Mt. Gox creditors may realize profits immediately.
This speculation is connected to BTC’s value in 2014, which was only $600. It suggests a 100x increase, which could tempt creditors to sell their holdings. In addition, if billions worth of Bitcoin is dumped to the market in a short period, ETF inflows won’t be able to offset the impact. This could lead to BTC price dip and heightened volatility.
Also Read: Breaking: Kraken Confirms BTC, BCH Receipt From Mt. Gox, Repayments Within Weeks
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