Will Mt. Gox payouts spark Bitcoin crash?

Given
some
of
those
who
owed
money
for
10
years
were
among
BTC’s
earliest
adopters,
fears
of
a
mass-selling
event
may
have
been
exaggerated.

There’s
a
black
cloud
looming
over
the
crypto
markets
—
the
ghost
of
a
crypto
exchange
that
collapsed
over
10
years
ago. 

Mt.
Gox
once
handled
over
70%
of
the
world’s
Bitcoin
transactions,
but
went
under
after
up
to
850,000
BTC
was
stolen
in
audacious
hacks.

The
doomed
Japanese
trading
platform
went
bankrupt
in
2014,
and
its
users
—
many
of
whom
were
early
Bitcoin
adopters
—
haven’t
been
paid
since.

This,
in
part,
is
due
to
painstaking
efforts
to
recover
some
of
the
stolen
crypto.
About
142,000
BTC
has
now
been
recovered,
and
is
set
to
be
distributed
to
creditors.

While
this
means
that
victims
won’t
be
made
whole,
they
can
take
some
comfort
in
the
fact
that
Bitcoin’s
worth
substantially
more
than
it
was
a
decade
ago.
In
dollar
terms,
they’ll
still
be
up
on
their
investment
—
albeit
not
as
rich
as
they
would
have
been.

What’s
more,
the
BTC
hard
fork
in
2017
also
means
they’ll
be
entitled
to
a
chunk
of
Bitcoin
Cash.

Compensation
is
due
to
be
paid
to
creditors
by
October,
ending
a
long-running
saga
after
repeated
delays.
But
how
is
the
process
going,
and
why
is
it
making
some
analysts
nervous?

‘Beware
of
Mt.
Gox’

Mt.
Gox
customers
have
been
sharing
updates
on
how
their
claims
are
progressing
through
a
specially
created

subreddit.

And
there
was
frenzied
excitement
on
April
22
when
some
accounts
were
updated.
Some
have
already
received
an
early
lump-sum
repayment
in
cash
—
and
others
have
been
told
how
much
BTC
and
BCH
they
can
expect
to
receive.

In
a
recent
report,
K33
Research
argued
that
this
142,000
BTC
haul
—
worth
about
$9
billion
at
current
market
rates
—
could
become
a
“negative
price
contributor”
in
the
weeks
to
come.

This
is
based
on
fears
that
those
who
are
finally
reunited
with
their
crypto
will
immediately
swap
it
for
fiat,
ramping
up
selling
pressure
in
the
markets.

But
there
are
a
few
things
worth
bearing
in
mind
here.

The
Mt.
Gox
Investment
Fund
—
the
creditor
that’s
owed
the
most
—
has

confirmed
it’s
got
no
plans
to
offload
the
Bitcoin
it
receives.

Given
the
sheer
amount
of
admin
involved,
transactions
are
unlikely
to
happen
in
one
go.
Customers
in
some
regions
have
already
received
the
initial
cash
payments
they
were
entitled
to
faster
than
others.

Bitcoin’s
daily
trading
volumes
are
rarely
below
$10
billion,
meaning
there’s
a
decent
chance
that
the
market
would
be
able
to
withstand
selling
pressure.
That
being
said,
confirmation
of
payouts
alone
might
be
enough
to
spook
traders.

And
another
factor
worth
considering
is
this:
many
of
those
set
to
receive
a
payout
believed
in
Bitcoin
long
before
it
reached
mainstream
consciousness.

Hold
or
sell? 

Late
last
year,
a
fascinating
poll
on
the
Mt.
Gox
subreddit
offered
an
insight
into
what
everyday
creditors
are
thinking.

Of
the
357
who
voted,
just
25%
said
they
intended
to
sell
almost
all
of
their
Bitcoin.
About
11%
revealed
plans
to
swap
half
of
the
crypto
they
receive
for
fiat.

But
by
far,
the
biggest
bloc
of
voters
—
45%
—
vowed
to
hold
on
to
their
digital
assets.

“I
held
for
10
years.
I
don’t
mind
holding
for
another
10,”
one
quipped.

“Already
made
all
the
profits
I
need.
In
it
for
the
heck
of
it,
so
why
sell?
I
want
to
see
where
Bitcoin
goes
and
be
a
part
of
it,”
another
added.

Some
did
express
a
desire
to
bow
out
of
the
market
—
and
spend
their
newfound
cash
on
vacations
and
other
investment
opportunities…
including
rival
cryptocurrencies.

End
of
an
era

In
dollar
terms
at
least,
Mt.
Gox
remains
the
biggest
crypto
heist
in
the
industry’s
history.

While
the
U.S.
has

charged
two
Russian
nationals
in
connection
with
laundering
stolen
Bitcoin,
the
identities
of
others
who
were
involved
in
the
audacious
attack
remain
unknown.

And
while
the
market
today
is
unrecognizable
compared
with
when
the
exchange
went
bankrupt
in
February
2014
—
when
Bitcoin
was
worth
a
mere
$550
—
you
could
argue
that
history
keeps
on
repeating
itself.

Why?
Because
a
long
line
of
creditors
has
now
formed
at
other
trading
platforms
that
suddenly
halted
withdrawals
and
went
under.

More
than
100,000
are
awaiting
compensation
after
FTX
imploded
—
that
said,
the
recent
rise
in
crypto
valuations
meant
they
could
receive
more
than
their
initial
claim
amount.