Defunct Tokyo-based exchange Mt. Gox prepares to return approximately $9 billion worth of Bitcoin to its creditors after a court order on 1 July 2024.
Shibuya-based Mt. Gox was found in 2010, and went on to become world’s largest Bitcoin exchange. But Mt. Gox failed after suffering hacks and subsequent losses between 2011 and 2014.
After a decade of delays and legal battles, the court finally said that the repayments will commence in July 2024. Around 20,000 creditors will receive a combination of Bitcoin and Bitcoin Cash – a crypto that emerged in 2017 from a Bitcoin hard fork.
However, the impending distribution has also sparked concerns about potential market volatility and downward pressure on Bitcoin prices.
We've heard a lot about the potential 9 billion dollar in selling pressure from Mt. Gox hitting the market soon.
But no one is talking about the 11 to 15 billion dollar in buying pressure from FTX hitting the market soon.
Listen, FTX owed more than… pic.twitter.com/NncwvLSm7q
— Crypto Nova (@CryptoGirlNova) July 1, 2024
Market is showing concern over the influx of 140,000 Bitcoins into the market, that could lead to increased selling pressure.
The Mt. Gox repayments come at a time when the broader cryptocurrency market is already experiencing volatility. Will investors see this as an opportunity to continue their long-term investment in the cryptocurrency, is the big question.
The Federal Reserve’s recent indications of a potential rate cut and other macroeconomic factors are expected to influence Bitcoin’s performance in the coming months. Additionally, the news has affected Bitcoin ETFs, with significant outflows reported, reflecting broader negative sentiment in the market
Read more: 5 Ways to Sell Bitcoin Instantly and Securely (2024 Updated)
Mt. Gox Handled Nearly 70% Of All Bitcoin Transactions At Its Peak
The exchange suffered a loss of 850,000 Bitcoins between 2011-2014. Mt. Gox – that stands for Magic: The Gathering Online Exchange -filed for bankruptcy in 2014 when Bitcoin was valued at $600. Hence, the loss at the time was about $473 million.
The recovered 140,000 Bitcoins are valued at nearly $9 billion, reflecting Bitcoin’s meteoric rise over the past decade.
As the market navigates this period of uncertainty, investors will be closely watching the behavior of Mt. Gox creditors and the broader market dynamics. The key will be the behavior of individual creditors and their willingness to hold onto their Bitcoin. While some may choose to “take the money and run,” others may see this as an opportunity to continue their long-term investment in the cryptocurrency.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
