Amid bitcoin’s recent fall, another black swan is brewing: Bitcoin exchange giant Mt Gox will reportedly return 140,000 bitcoins (BTC) to its creditors. How might the market react to the bitcoin supply spike?
Mt Gox, once the world’s largest bitcoin exchange was hacked in 2014. Hackers stole 850,000 BTC from about 1,000 Mt Gox’s users. And the exchange finally announced its bankruptcy. Damaged users and creditors have been pursuing huge amounts of financial compensation. In 2019, the Japanese court ruled that Mt Gox would send 140,000 BTC to a trust for custody, until creditors finalize the bitcoin redistribution plan.
Seven years after the hacking, Mt Gox’s attorney issued a letter on Nov 16. Mt Gox announces that a large majority of voters vote in favor of the bitcoin redistribution plan. And it is closer to becoming final and binding. Thereby, the largest legal case in bitcoin history is said to be coming to an end.
Therefore, if materialized, Mt Gox will return the 140,000 bitcoins after 7 years to the massive damaged users and creditors. However, Mt Gox did not disclose the exact repayment time and bitcoin amount to pay.
Mt Gox: Once The World’s Biggest Bitcoin Exchange
Back in 2014, 140,000 bitcoins valued $77 million – at a price of $550 per bitcoin. 7 years later, that lot of bitcoins has a market value of more than $84 billion.
So, if Mt Gox is to release 140,000 bitcoins to the market, how might the market react to the supply spike? According to a market analysis, there is no confirmation on when Mt Gox would pay out the bitcoins. It is likely that the bitcoin redistribution will not occur imminently. Additionally, the ruling has been announced for years, and the result should be within the market expectation..
A Chinese veteran bitcoin investor said he doesn’t find it significant, even though he is one of Mt Gox’s creditors. “Nowadays, it is not a big problem for the market to take in a 200,000 BTC supply spike,” said Mindao Yang. “Besides, those who get bitcoins are all early cryptocurrency investors, right? They are unlikely to be in a hurry to sell them.”
For now, bitcoin has a market value of $1.12 trillion. Its transaction volume in the past 24 hours reached $45.3 billion, or about 75,000 BTC.
The Mt Gox hack is a watershed moment in the bitcoin market. Following the hack, Mt Gox suspended all transactions on the exchange and closed down in February 2014. The Japanese exchange collapsed amid fraud and mismanagement allegations. Moreover, Mt Gox CEO Mark Karpeles was accused of embezzlement and data falsification.
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