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News/Bitcoin Price Faces New Pressure as Mt. Gox to Repay Creditors in July 2024

Bitcoin Price Faces New Pressure as Mt. Gox to Repay Creditors in July 2024

Van Thanh Le

Jun 24 2024

3 weeks ago3 minutes read
Cubic robot balances on blockchain tightrope, carrying Mt. Gox BTC briefcase

Mt. Gox Creditors to Get Bitcoin Repayment in July

Mt. Gox, once the world’s largest Bitcoin exchange, is set to begin repaying creditors in Bitcoin (BTC) and Bitcoin Cash (BCH) starting in early July 2024. This repayment marks the end of a decade-long wait for approximately 127,000 creditors affected by the exchange’s 2014 collapse. 

The downfall of Mt. Gox, triggered by multiple hacks over several years, led to the loss of over 850,000 BTC, currently valued at more than $51.9 billion. At its peak, the exchange processed over 70% of all Bitcoin transactions, and its collapse sent Bitcoin prices tumbling to a local low of $420.

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Source: Mt. Gox's announcement

Creditors are owed over $9.4 billion in Bitcoin. In May 2024, Mt. Gox transferred 141,686 BTC, worth $9.62 billion, to a new wallet in preparation for repayment. This move is part of a rehabilitation plan that has experienced numerous delays, with the latest deadline initially set for October 2023. 

Following the repayment announcement, Bitcoin prices dropped from over $62,300 to about $60,500. Currently, Bitcoin is trading around $60,300, down more than 6% over the past 24 hours. The impending distribution of 140,000 BTC is expected to increase selling pressure on the market.

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Market analysts are divided on the potential impact. Alex Thorn, head of research at Galaxy, predicts that fewer coins will be distributed than anticipated, estimating around 95,000 coins to be released in July. Thorn believes many creditors might hold onto their Bitcoin due to the tax implications and their resistance to years of offers from claims funds. 

On the other hand, Andrew Kang of Mechanism Capital foresees a multi-billion dollar cascade due to the upcoming market pressures, including the Mt. Gox repayments. Crypto trader DonAlt underscores the necessity for significant bullish momentum to counteract the possible negative effects.

Bitcoin, which hit an all-time high of $73,798 in March, has recently underperformed compared to traditional assets. Market Analyst Tony Sycamore of IG Australia Pty identifies a possible support zone for Bitcoin at the 200-day moving average of about $57,500. 

Conclusion

The Mt. Gox repayments are just one of several factors currently influencing the Bitcoin market, alongside regulatory changes and technological advancements. The digital asset landscape continues to evolve, with ongoing discussions about the future of cryptocurrencies and their regulation.

FAQs

1. When will Mt. Gox begin repaying creditors, and in what form?

Mt. Gox will start repaying creditors in early July 2024, distributing Bitcoin (BTC) and Bitcoin Cash (BCH). This marks the end of a decade-long wait for approximately 127,000 creditors.

2. How many Bitcoin are expected to be distributed, and what is the potential market impact?

About 140,000 BTC are expected to be distributed, which could increase selling pressure on the market. However, analysts predict only around 95,000 BTC might be released initially, with some creditors likely holding onto their Bitcoin due to tax implications.

3. How has the announcement of repayments affected Bitcoin prices recently?

Following the repayment announcement, Bitcoin prices dropped from over $62,300 to about $60,500 and are currently trading around $60,700, down more than 5% over the past 24 hours. The impending distribution has led to concerns about increased market pressure.

This article has been refined and enhanced by ChatGPT.

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