The repayment deadline for the infamous Mt. Gox hack is approaching, raising concerns about its potential impact on the cryptocurrency market. Mt. Gox, once the world’s largest Bitcoin exchange, suffered a security breach in 2014, resulting in the loss of 850,000 BTC. After years of bankruptcy proceedings, the exchange’s trustee is scheduled to finally repay the creditors by the end of October 2023. This impending event has caught the attention of industry observers, who anticipate significant repercussions.
Should the repayment take place as planned, there are several ways in which the cryptocurrency market could be affected. Jacob King, the CEO of WhaleWire, believes that most creditors, having lost their Bitcoin nearly a decade ago, will likely sell at least a portion of their recovered BTC. This influx of sell orders could potentially create downward pressure on prices and lead to a market downturn. King also points out that the repeated delays in the Mt. Gox repayment process have eroded investors’ confidence, contributing to a sense of disillusionment within the market.
While some creditors expect to hold onto their coins, others foresee selling pressure from non-claimants concerned about potential price decreases once the news of the release spreads. However, the magnitude of the sell-off remains uncertain. Frank Weert, co-founder of Whale Alert, notes that this type of event has never occurred on such a scale before, making it challenging to predict its full impact.
Mt. Gox is expected to reimburse over 10,000 crypto creditors worldwide, with an estimated payout of 142,000 BTC ($4.3 billion) and 143,000 Bitcoin Cash (BCH) worth approximately $40 million. Additionally, the exchange plans to pay out 69 million Japanese Yen ($510 million). The repayment will be conducted using a combination of fiat currency and cryptocurrencies, with each payout individually coordinated with the investors.
The amount of Bitcoin to be returned to Mt. Gox creditors is comparable to the holdings of Bitcoin advocate Michael Saylor, who possesses at least 152,333 BTC ($4.52 billion). However, some skeptics downplay the potential impact, emphasizing that the current daily on-chain and exchange volumes are significantly larger than the repayment amount. Mati Greenspan, founder of Quantum Economics, believes that the market can absorb the repayment relatively quickly. While there may be some selling pressure due to speculation, Greenspan highlights the positive aspect of mass distribution, with many OG Bitcoin holders reactivating their involvement in the network.
Overall, as the Mt. Gox repayment deadline looms, the cryptocurrency community awaits this significant event. Its impact on the Bitcoin market remains uncertain, with both optimistic and cautious perspectives emerging. Regardless of its outcome, the resolution of the Mt. Gox saga is expected to provide closure and potentially alleviate long-standing concerns surrounding the incident.