As a long-term crypto investor who unfortunately lost some of my funds in the infamous Mt. Gox hack back in 2014, the recent news about the repayment process has brought both excitement and apprehension. The thought of finally seeing my losses being partially compensated is undeniably gratifying; however, I can’t help but feel a sense of unease as I recall how previous similar events have affected the market in the past.
The long-anticipated Bitcoin repayment procedure initiated by Mt. Gox’s bankruptcy estate is underway. Recently, they transferred 47,282 Bitcoins, which are intended for creditors, marking the commencement of this process. Creditors may receive their assets in their wallets within the next few days. However, it could take up to 60-90 days for some, although this timeline is considered the least favorable scenario.
As an analyst, I can rephrase that statement as follows: Last month, Mt. Gox’s trustee, Nobuaki Kobayashi, announced through a press release that creditor repayments will commence from July 2024. He emphasized the importance of ensuring secure and dependable repayment methods, adhering to financial regulations in each jurisdiction, and engaging in dialogue with cryptocurrency exchanges regarding repayment plans.
ALSO READ: Mt. Gox Will Begin Repaying Creditors in July
As an analyst, I would explain it this way: Mt. Gox will transfer funds to a select group of exchanges, namely Bitbank, Bitstamp, Kraken, BitGo, and SBI VC Trade, for onward distribution to the creditors who have filed for their repayments. The timing of these transfers may differ among exchanges due to their individual policies, with some expediting the process and others experiencing delays.
The announcement that the exchange would pay off its debts caused a surge in selling among large Bitcoin investors, who cashed out their holdings in expectation of a price drop. Consequently, Bitcoin struggled to make significant gains throughout the previous month. Starting from the second day of July, Bitcoin’s value started to decline in preparation for these repayments.
ALSO READ: Bitcoin Dips Below $57,000 Following Mt. Gox Wallet Activity and German Government Liquidating $175 Million
I, as an analyst, observed that on July 5, Bitcoin dipped below the $54,000 mark, a price level it had not reached in several months. The potential sale of Mt. Gox-related assets to their creditors could exacerbate this downward trend. These creditors are anticipated to sell substantial portions of their repayments immediately upon receipt, resulting in a significant surge in selling pressure.
Image by Steve Buissinne from Pixabay
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2024-07-06 11:24