How Will the $9 Billion Mt Gox Earthquake in Bitcoin Affect the Market? Here Are Two Expert Opinions
The Bitcoin and cryptocurrency market is a big Mt. Gox is preparing for the earthquake. So will users sell their assets?
Mt., whose acronym is derived from “Magic: The Gathering Online Exchange.” Gox closed its doors in February 2014 following a series of hacking incidents. The company blamed a bug in the structure of BTC for the disappearance of BTCs. Mt. According to Gox, coins may have been illegally moved from their accounts by hackers, while users received missing transaction messages when accessing the exchange.
The court-appointed trustee overseeing the exchange's bankruptcy proceedings announced Monday that distributions to the firm's approximately 20,000 creditors will begin next month. Payments will be in the form of a mix of Bitcoin and Bitcoin Cash, an early fork of BTC.
Luke Nolan, Ethereum researcher at digital asset management firm CoinShares, Mt. Gox said a key reason creditors prefer to be repaid with the same type of asset has to do with tax consequences. JPMorgan noted on Monday that people tend to accept their payments in crypto, either for tax reasons or because they believe liquidating now will negate potential price increases in the future.
Glover suggested that these are ways to avoid a huge capital gains tax while still benefiting from Bitcoin's massive appreciation. “Those who live in countries with a capital gains tax may choose to hedge their positions to avoid this large tax bill and instead use their BTC as collateral to borrow dollars so they can cash out their BTC without having to sell it,” Glover said.
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