On the afternoon of June 24th, Taipei time, a news article about "Mt. Gox will start the repayment of Bitcoin and $BCH" quickly triggered the market. Due to concerns about potential selling pressure, the already weak cryptocurrency market suffered further setbacks. Bitcoin The currency once fell below the US$60,000 mark, and Ethereum also approached US$3,200.

However, there is still great confusion and even rumors in the market regarding the Mt. Gox repayment incident itself, so that most readers do not yet understand the full story of the incident and are unable to proactively assess the potential impact of the incident on the market. In order to eliminate these doubts, Odaily Planet Daily will combine market data and interviews with creditors (dForce founder Mindao) to clarify this information in a question and answer format.

Q1: Is this the first time Mt. Gox has made a debt repayment?

A1: No, as early as December 21, 2023, many Japanese-speaking users have posted on social media claiming to have received compensation in Japanese yen through PayPal, including the founder of bitFlyer, Japan's leading exchange Yuzo Kana.

Combining the email notice from Nobuaki Kobayashi, the liquidator of Mt. Gox at the time, it can be seen that this part of the compensation funds came from the 7 billion yen that Nobuaki Kobayashi redeemed from the bankruptcy trust on November 17, 2023.

Q2: Why is this repayment so special?

A2: Because this is the first time Mt. Gox has made repayment in the form of Bitcoin and $BCH, it means that the 141,686 Bitcoins held by Mt. Gox (and basically the same amount of BCH) will begin to flow to the market.

These Bitcoins represent 0.72% of the total circulating supply of Bitcoin and are worth approximately $8.54 billion.

Q3: When will the repayment take place – when will the selling pressure come?

A3: According to Nobuaki Kobayashi’s latest email announcement, repayment will begin in July 2024.

Q4: The most critical question, what are the repayment details?

A4: Creditor Mindao stated that Mt. Gox will calculate each creditor according to the Bitcoin price at the time of bankruptcy (only the creditor group that has chosen to receive repayment in the form of "kind", because some creditors have chosen to accept legal currency repayment ) of the creditor's rights, and then the Bitcoins held will be distributed to different creditors according to the proportion.

Considering that Mt. Gox lost a total of about 650,000 Bitcoins that year and still holds 140,000 Bitcoins, this means that the recovery rate of the Bitcoin currency standard is about 21.5%. To put it simply, if you held 100 Bitcoins in Mt. Gox back then, you can only get back about 21.5 Bitcoins now. The currency standard has undoubtedly plummeted, but considering Bitcoin’s hundreds of times increase in recent years, the legal currency standard It is a blood profit (equal to passive lock-up).

Odaily Note: Regarding the specific losses in the Mt.Gox hack incident, the exchange initially stated that 850,000 Bitcoins were lost (750,000 belonging to customers and 100,000 belonging to the platform), but later Mt.Gox stated that they had been found on the system. 202,185 Bitcoins were thought to have been stolen, so the loss should be 650,000 Bitcoins.

Q5: Why must the debt-to-equity ratio be calculated based on the Bitcoin price of that year?

A5: Essentially, it is because of "insolvency". The amount of Bitcoin currently held by Mt. Gox cannot cover its currency-based liabilities, and it is impossible to repay it in kind at a ratio of 1:1. This determines that Mt. Gox must find a solution. A price is used to calculate the proportion of claims and then allocate current positions. The specific price depends on the Japanese court's ruling when considering the bankruptcy case.

Mindao also added that at that time, users on the Mt.Gox exchange held not only Bitcoin, but also legal currency assets, so Mt.Gox had to choose a certain currency as the basis for calculations - in fact Mt.Gox uses the Japanese yen price as its benchmark.

Q6: What was the price of Bitcoin that year? What subject?

A6: The Tokyo District Court has previously made a liquidation ruling in the bankruptcy case of Mt.Gox. According to Japanese bankruptcy regulations, the value of Mt.Gox’s Bitcoin claims will be calculated at the price when the company went bankrupt in April 2014 - per bit The value of the claim on the currency is fixed at 50,058.12 yen (approximately US$314 at the current exchange rate).

However, this price will only be used to calculate the creditor's proportion of the claim and does not mean that the creditor will only receive 50,058.12 yen for each Bitcoin held. In fact, according to the form of repayment in the form of a proportion of claims, the final amount that creditors can receive per Bitcoin is much greater than this figure.

Mindao added that when Mt.Gox suffered a hacker attack in June 2011, Bitcoin on the Mt.Gox site dropped to as low as $150, while the market price at that time was about $300, which meant that bargain hunting on the Mt.Gox site that year was Bitcoin users can obtain the maximum compensation "profit".

Q7: How do creditors receive repayment?

A7: The creditor has registered the payment address at the beginning of this year, and will later collect payment through Kraken, Bitstamp, Bitgo and other exchanges.

Q8: What is the holding address of Mt.Gox? How to detect flow?

A8: After the last collection on May 28, the Bitcoins currently held by Mt. Gox are mainly stored in three addresses, each of which holds 47,230 Bitcoins. The specific address is as follows:

  • 1AsHPP7WcGnDLzxW2bUa2FcbJP3eZVEqpx；

  • 16eAGJEjqsUqngMfcysQECvp7TMU37P9gX；

  • 1HeHLv7ZRFxWUVjuWkWT2D5XFbXXvHoV68；

It is recommended to use the Mt.Gox wallet interface provided by Arkham for monitoring.

Q9: Who are the groups that have received repayments? Has the debt structure changed over the years?

A9: There are changes. The Mt. Gox hacking incident has occurred for many years, and related claims have been circulating in the market for a long time. A large number of original creditors have traded their claims to institutions that specialize in bankruptcy claims out of the need to realize cash as soon as possible.

Galaxy Research Director Alex predicts that approximately 20,000 Bitcoin claims have been acquired by bankruptcy funds, and an additional 10,000 claims are owned by the exchange Bitcoinica BK.

Q10: How to evaluate potential selling pressure?

A10: It depends on the creditor’s sales expectations after receiving repayment.

Mindao said in this prediction that after all, this matter has been going on for ten years, the creditors are also the earliest participants in the currency circle (diamond hands), and many claims have also changed hands during the period, so the psychological impact may be greater than the actual impact.

Alex gave a similar prediction. The vast majority of institutions that have been active in acquiring Mt. Gox over the years are high-net-worth Bitcoin holders who prefer to accumulate positions at discounts rather than arbitrage through quick trades.

Alex added that given the poorer liquidity of the $BCH market and the fact that creditors’ faith in $BCH is obviously lower than that of Bitcoin, it is expected that $BCH will perform relatively poorly after Mt. Gox’s repayment.

[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.

  • This article is reprinted with permission from: "Foresight News"

  • Original author: Azuma, Odaily Planet Daily