Is BTC price pullback related?
Since defunct Japanese cryptocurrency exchange platform Mt. Gox, said it would begin paying out nearly $3 billion in bitcoin (BTC) to customers affected by a 2011 hack, some traders have been anxious about the potential impact of the BTC refund on the crypto king’s price.
Many investors fear that Mt. Gox’s customers, who will be reunited with their stolen coins after many years, will be tempted to sell them for a huge profit, further increasing the selling pressure.
Could BTC’s recent pullback, which saw around $4,000 wiped off the major cryptocurrency’s value in a week, have its roots in Mt. Gox customers’ potential sales?
What is Mt. Gox?
Mt. Gox was a Tokyo-based cryptocurrency trading platform that operated from 2010 to 2014. At the height of its operations, the platform was responsible for 70% of BTC’s trading volume.
In February 2014, Mt. Gox filed for bankruptcy claiming $64 million in losses after being the victim of a hack that saw 740,000 bitcoins (BTC) stolen from its customers and another 100,000 bitcoins (BTC) from the company itself. More than 800,000 stolen bitcoins had a total value of $460 million at the time.
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They haven’t had access to bitcoin in 8 years and they average 80-100 times their investments. Of course at least half of them will sell.
— Sergio #Bitcoin (@Sergio87815471) 21 August 2022
Repayment plan
About 200,000 of the stolen bitcoins were recovered by Mt. Gox’s team in 2014, but these coins have been locked in litigation ever since.
In November 2021, a rehabilitation plan was drawn up by Mt. Gox bankruptcy trustees bound by Tokyo District Court’s confirmation order.
On July 6, 2022, Mt. Gox bankruptcy trustee Nobauaki Kobayashi issued a letter to creditors, outlining the next steps in the repayment plan.
Kobayashi stated that “from about the end of August this year until all or part of the repayments made as initial repayments have been completed for safe and secure repayments.”
BTC retreat
After hitting two-month highs last week, the biggest of cryptocurrencies repeatedly failed to convincingly break through the $25,000 resistance mark and was eventually sent in a different direction, falling below $21,000. Could the decline be due to Mt . Gox clients have been dumping the returned coins en masse?
Does Mt. Gox’s refund affected last week’s BTC decline?
In a word, “no”.
The repayment plans have little to do with the crypto king’s recent withdrawal, as the payout is yet to begin later this month. Furthermore, when repayment begins, it will be in installments rather than a one-off refund.
Meanwhile, some traders are worried about the potential impact the refund could have when it happens, and some may be nervously selling now due to fears of a bigger sell-off coming when Mt. Gox bitcoins are repatriated.
A Twitter user who writes under the nickname Sergio Bitcoin wrote.“They haven’t had access to bitcoin for eight years, and they are on average 80-100 times up on their investments. Of course at least half of them will sell.”
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