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Mt. Gox Repayment Coming in October: What Will Happen to Bitcoin Price

Published July 11, 2023 4:20 PM
Omar Elorfaly
Published July 11, 2023 4:20 PM

Key Takeaways

  • Mt. Gox creditors are set to receive payouts in October 2023.
  • 142,000 BTC, currently worth $4.3 billion, are set to return to general circulation.
  • Analysts believe it could influence the market price of Bitcoin.

In just three months’ time, $4.3 billion worth of Bitcoin is set to be paid out to creditors of the defunct, infamous Mt. Gox cryptocurrency exchange. 

The trustee in charge of recouping funds from the exchange closed final creditor registration in preparation for the reimbursement of user BTC holdings in April 2023. A statement  from attorney Nobuaki Kobayashi tipped October 31 for the processing of some payments to creditors.

Some 20,000 creditors are looking to receive funds that were lost in the collapse of Mt. Gox, which became the most infamous cryptocurrency exchange failure between 2010 and 2020 before the likes of FTX imploded.

While an official number is yet to be confirmed by Mt. Gox , an estimated 142,000 BTC are held by the trust, valued at around $4.3 billion as of July 2023. Twitter bot MtGoxBalanceBot tips the known addresses of the Mt. Gox trustee to hold 135,890 BTC.

Given the substantial amount of Bitcoin set to be repaid to creditors, as well as the significant appreciation in the value of the holdings of Mt. Gox users since the exchange went defunct, a potential offloading of recouped BTC onto various exchanges is touted to influence the price of Bitcoin later this year.

Total Repayment Less Than BTC’s Daily Trading Volume

The biggest talking point ahead of the looming Mt. Gox creditor payout is the potential price impact the event will have on Bitcoin across the world. As initially reported  by Cointelegraph, some analysts believe that the repayment program might not be as influential as it is being made out to be.

Quantum Economics founder and seasoned cryptocurrency market analyst Mati Greenspan said that the amount of BTC that is set to be returned simply pales in comparison to present-day trading activity.

“Some will HODL. Some will sell. Ultimately, it doesn’t really matter since the total Mt. Gox repayment is marginally less than BTC’s daily trading volume,” Greenspan wrote on Twitter.

Meanwhile, analysts from the popular YouTube channel CryptoBanter suggest that cryptocurrency markets take a bearish turn in the lead-up to the Mt. Gox repayment date, the potential for a sizable portion of BTC being sold off on markets might have a compounding negative effect on the price of Bitcoin.

22,500 Creditors Recognized, Claims Amount to $18.6 billion BTC

A report published  by Blockchain Research Lab (BRL) in August 2022 highlights that a total of 22,560 individual creditors were recognized by the Mt. Gox trustee.

20,658 of the creditors have made claims in BTC while 11,868 made fiat currency claims. The report tipped the claims to be valued at $18.6 billion in BTC and Bitcoin Cash as well as $48 million in US dollars.

Interestingly, Mt. Gox founder Mark Karpeles indicated that the exchange had 1.1 million active accounts in 2013, meaning that only 2.1% of all active accounts filed and received claims.

BRL suggests that many accounts might not have had substantial holdings at the time of Mt. Gox’s bankruptcy filing as a possible reason for this low percentage.

The report also noted that the average claim for Mt. Gox Bitcoin creditors is ~39 BTC, which is valued at $1.1 million as of July 2023. Creditors can expect to receive double that amount, given that they’ll receive an equal amount of Bitcoin Cash (BCH) tokens following the hard fork of the latter blockchain from the Bitcoin core network.

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