Potential Impact of Mt. Gox’s Final $34,822 BTC Payment on Market Stability: Could a $2 Billion Bitcoin Sell-Off Cause a Crash?
Mt. Gox is nearing the completion of its repayment process. The defunct exchange has partnered with five cryptocurrency exchanges to facilitate repayments to creditors following the 2011 hack. These exchanges include Bitbank, BitGo, Bitstamp, Kraken, and SBI VC Trade, a Japanese exchange. Four of these exchanges have already received and distributed funds to most creditors, with BitGo being the final recipient. Let’s delve into the latest updates on Mt. Gox’s repayment progress.
Recently, Mt. Gox made a significant payment of 34,822 Bitcoins to two specific wallet addresses. The wallets, identified as bc1q4…ft36 and bc1q2…mw3f, received 858.645 BTC and 33,964 BTC, respectively. While speculation suggests these wallets may belong to BitGo, this information remains unconfirmed. Following these transactions, the wallets have remained inactive after conducting test payments.
Market dynamics were impacted on July 5 when Mt. Gox announced its intention to commence creditor repayments. Concerns arose within the market, with experts anticipating immediate sell-offs by recipients. This sentiment led to a somewhat bearish trend in Bitcoin prices, inducing market panic. The fear of potential sell-offs, coupled with the German government’s sale of seized Bitcoins, contributed to market instability. Despite these uncertainties, approximately $3.2 billion in Bitcoin has been successfully repaid to creditors, with a significant portion opting not to liquidate their holdings.
Mt. Gox is obligated to repay approximately $9.2 billion in Bitcoin and Bitcoin Cash to its 2011 creditors. The court-appointed trustee overseeing the exchange’s bankruptcy proceedings disclosed this information on July 5. Creditors have been sharing updates on repayment receipts on platforms like Reddit. Some individuals have raised concerns regarding delays in payments from certain cryptocurrency exchanges, citing verification processes as the primary reason for the delays.
Following the latest $2 billion payment, Mt. Gox is poised to eliminate its outstanding debts, culminating an 11-year journey. Market sentiments have stabilized as creditors have refrained from immediate sell-offs. Industry experts note that many creditors have gained a deeper appreciation for Bitcoin’s long-term value after enduring a decade-long wait for reimbursements. These creditors, often referred to as “diamond hands,” despite not having direct custody of their investments, have demonstrated resilience. The community awaits the actions of future payment recipients, questioning whether they will hold onto their Bitcoin holdings or opt for immediate liquidation.
