- After 10 years, Mt. Gox creditors can get their assets back.
- However, $9 billion in Bitcoin flooding the market may risk stalling the rally.
- Here’s why some people say that risk is very small.
Creditors in Mt. Gox will soon start seeing their $9.2 billion in Bitcoin held since the bankrupt exchange’s 2014 collapse.
The process will kick off in July, according to a notice from the Rehabilitation Trustee, which has been preparing to make the repayments in Bitcoin and Bitcoin cash.
“We have taken time to ensure safe and reliable repayment to creditors, including technical remedies for safe repayments, compliance with financial regulations in each country, and discussion of repayment arrangements with the cryptocurrency exchanges,” said the notice from the trustee.
Launched in 2010 in Japan, Mt. Gox was one of the earliest crypto exchanges — it once handled some 70% of all Bitcoin trades.
Mt. Gox’s bankruptcy a decade ago left creditors and their $9.2 billion worth of Bitcoin in limbo.
Those more than 140,000 Bitcoin could flood the market any time before October 31, Mt. Gox’s final deadline for repayments.
The timing and pace of the dump is yet unclear: “Please wait for a while until the repayments are made,” said the notice.
Price impact
Bitcoin’s price has slumped, in part because of jitters about the impact of such a large chunk of Bitcoin suddenly flooding the market.
But Brian Dixon of crypto hedge fund Off The Chain Capital, which has purchased Mt. Gox claims, says his firm will be “very methodical” about selling the Bitcoin it receives.
The CEO said the Mt. Gox position makes up almost a fifth of his fund.
“We’re going to start looking at other opportunities where we can get other crypto assets at a discount, because that’ll help us outperform Bitcoin,” Dixon said in March. “But that doesn’t mean we’re going to try to sell all at once.”
Brad Howell, managing director of crypto market maker Keyrock UK, has said that the market could easily absorb the selling pressure.
The impact of Mt. Gox on the market will be heavily influenced by sentiment, not actual market dynamics, he said.
“It is fair to assume that anyone who had assets in Mt. Gox is an early adopter, and more likely to lean towards the Bitcoin maxi end of the spectrum,” Howell told DL News in March, referring to diehard Bitcoin enthusiasts.
In other words, the types that piled their Bitcoin into Mt. Gox are likely to HODL, or hold tight onto their crypto, he said.
“Don’t expect huge volumes to be dumped on day one.”
The Block first reported the July timeline.
