Mt. Gox October redemption date approaches, crypto observers are expecting a major industry event this fall.
While the cryptocurrency community is actively discussing the upcoming Bitcoin halving in 2024, another potentially major market event is taking place this year.
Trustee of hacked Bitcoin
Stock Exchange, Mt. Gox is finally preparing to repay the exchange's creditors by the end of October 2023. If this happens, the cryptocurrency market could be significantly affected in several ways, some industry observers agree.
Founded in 2010, Mt. Gox was once the largest Bitcoin exchange in the world and was estimated to facilitate around 70% of all BTC transactions before its implosion.
The now-defunct exchange lost 850 BTC in a security breach in 000.4 – % of all Bitcoin to be issued. The event was held at Mt. Gox into one of the biggest cryptocurrency bankruptcies of all time, with creditors yet to be repaid nine years later.
Current Mt. Gox redemption date is scheduled to occur in approximately three months, Cointelegraph reports that the expected Mt. Gox reached out to some crypto executives to find out what to expect from the refund.
What will investors do after getting their Bitcoins back?
WhaleWire founder and CEO Jacob King, Mt. Gox's refund will be a unique event that is sure to have a significant impact on the market.
After losing all of their Bitcoin almost 10 years ago, most creditors are likely to sell at least some of their BTC when they eventually get it back, King told Cointelegraph.
“This influx of sell orders could put downward pressure on prices and potentially lead to a market downturn,” he said. King also visited Mt. Gox also cited numerous lengthy delays in the repayment process, which caused "a feeling of frustration among investors and eroding their confidence in the market."
WhaleWire CEO continued:
"It's a simple question, what will investors do? Over the past year, we've seen more selling than buying, and many of the losers on Mt. Gox have moved past crypto. With everything that's happened, the chances they have for many more years are highly unlikely."
Mt. Some of Gox creditors admit that the Bitcoin market may face some selling pressure after the refund is made. However, he finds himself on Mt. As one trader who identified as a Gox creditor told Cointelegraph, many claimants are likely to continue hodling. He said:
"Once we get our coins, I think we'll all keep them. But when the news reaches the world that these coins will be released, people who have coins but no demand will sell them because they're afraid the price will drop."
How much will be refunded?
Mt. Gox expects to repay a total of more than 10,000 crypto creditors from around the world by the end of October. Despite the exchange losing 850,000 BTC, Mt. Gox will only refund part of the total losses from the hack, as the firm was only able to recover part of the funds.
According to online reports, Mt. Gox repaid its creditors 142,000 BTC ($4.3 billion) and 143,000 of its forked cryptocurrency Bitcoin Cash, worth roughly $40 million. It was reported that the bankrupt exchange will also pay 69 billion Japanese yen ($510 million). Payments will be made using a combination of fiat currency and cryptocurrencies, and each payment will be coordinated individually with each investor.
Mt. Gox funds will be a big deal, Whale Alert co-founder Frank Weert agrees. But the way it affects the market will depend on how the funds are released and how the media reports it, the manager told Cointelegraph.
"We're sure some will be pleased to finally be able to make money, but we doubt it will result in a massive sale," he said. When asked if the crypto industry has seen a similar event, Weert said there has been no event of such a scale so far.
Some major creditors, including Bitcoinica and MtGox Investment Funds, have reportedly chosen to have their bankruptcy recovery funds paid out in Bitcoin.
Mt. on Twitter According to data from the Gox balance boat, Mt. Gox trustees hold 135,890 BTC across all known addresses at the time of writing.
Mt. Gox Bitcoin redemption amount close to Michael Saylor's BTC holdings
Many crypto enthusiasts like Mt. Gox refund will be a major event, some skeptics are confident that the potential impacts will likely fade quickly.
Mt. The amount of Bitcoin that will be returned to Gox creditors is comparable to the assets of Bitcoin advocate Michael Saylor, who holds at least 152,333 BTC ($4.52 billion).
“Either way, it doesn't seem like much,” Quantum Economics founder Mati Greenspan told Cointelegraph. Addressing the current value of Bitcoin to be refunded, Greenspan emphasized that current daily on-chain volumes are much larger.
Related: $30 billion stolen from the crypto ecosystem since 2012: Report
"Daily on-chain volumes are reported to be around $12 billion per day, and foreign exchange volumes are reported to be around $18 billion per day," he said and added:
"So this is definitely something that the market can absorb in a relatively short period of time. I would assume there could be some selling pressure due to speculation around this event. A lot of people don't know the basic math."
Greenspan also noted that Mt. He emphasized that Gox's Bitcoin will be distributed to many people, which could very well be a "mass distribution event" for the network.
"That's a lot of OGs to reactivate. Some will sell and wash their hands, but I bet many will become staunch advocates of self-custody," he added.
The manager also noted that Mt. He expressed optimism about the potential payback, stating that FUD on Gox had "plagued the market" for many years and that "it would be good to see it finally put to bed."