#Bitcoin
Will Bitcoin’s price bear the brunt of Mt. Gox’s repayment plan?
Mt. Gox’s repayment plan may ripple through Bitcoin market, prompting concerns.
The following is a guest post by Nischal Shetty, co-founder and President at Shardeum.
Mt. Gox’s dormancy might not be over, but a series of tokens moving out from its wallets has caught the attention of the market. A total of 137,890 BTC valued at $9.4 billion is presumed to be headed to creditors’ wallets, and this has warranted a mixed set of responses from experts, most of whom are concerned about a potential increase in selling pressure and a subsequent drop in Bitcoin’s price.
Mt. Gox was once the world’s leading Bitcoin exchange before it was hacked in 2014, leading to the loss of over 850,000 BTC. After years of legal battles, Japanese authorities finally approved a rehabilitation plan in 2021, launching a legal procedure known as “civil rehabilitation,” allowing creditors to recover some portion of their lost funds.
The plan has become effective as creditors who lost their funds are now allocated a part of the remaining ones. Mt. Gox’s planned repayments to creditors might have played some role in a 4% decline in Bitcoin’s price over the past 24 hours, which the market was able to shake off with an eventual rebound. However, there is a concern that these newly freed coins will flood the market, leading to a selloff and driving the price down further.
In an official statement, Mark Karpeles, former CEO of Mt. Gox, confirmed that while Bitcoin sell-offs aren’t happening now, tokens being moved from Mt.Gox to a new wallet is part of the larger plan to distribute to creditors.