Bitcoin is set to experience a black swan event as MT.GOX trustee prepares to unlock 150000 BTC
Background of the story
Mt. Gox was one of the earliest cryptocurrency exchanges, and at some point represented more than 70% of all trades made within the blockchain ecosystem. Following a major hack in 2011, the site subsequently collapsed in 2014 due to alleged insolvency; the fallout affected about 24,000 creditors and resulted in the loss of 850,000 BTC($17,000,000,000 in today's prices). In November 2021, the exchange's trustee confirmed that the rehabilitation plan was in Japan's court system.
Why should you care about it today?
Obviously, as a crypto investor, you should consider the possible outcome of so many coins being put on the market simultaneously.
And it seems the court has given the creditors till the 15th of September to choose their repayment plans. The document is unclear about the deadline for the restriction period but confirms that it will be followed by the first entire repayment to creditors, as outlined in the Rehabilitation Plan approved by roughly 99% of the eligible users affected by the case.
If this plan comes to pass this can mean bad news for BTC and crypto in general adding to the bloodbath we have been seeing in the past months through the bear market. Billions worth of BTC and BCH will go on exchanges to be liquidated for cash.
More delays?
BREAKING:
— Michaël van de Poppe (@CryptoMichNL) August 28, 2022
Mt. Gox will not be releasing the #Bitcoin, and will delay the distribution, once again.
The entire crypto space was stressing out heavily on this, but unwarranted.
In a Twitter thread, Eric Wall introduced himself as an Mt. Gox creditor and confirmed that there would not be a 137,000 BTC dump, countering the rumors floating around on social media. According to Wall, the exchange has not yet completed the infrastructure needed to commence the repayment.
Wall also said that at the moment, people are still unable to register where to send Bitcoin and Bitcoin Cash (BCH) payments. The creditor also believes that payments should occur in various installments, dismissing the fears that thousands of Bitcoin will be sold all at once, dumping the cryptocurrency’s price.
Wall also noted that the crypto exchange has not yet provided a timeline detailing when it will proceed with its repayment process. Following this, the creditor argued that even if the BTC were released, he would rather buy than sell because of the current market conditions.
As of today with the available data, we can't say anything clear about the unlock date or its process. But we are sure to keep an eye on it.