Mount Gox Adversity Realized... Repayment After 10 Years [Bitcoin Now]

Last Week's Intraday $60,000 Breakdown... Inflow of Bargain Buyers
Market Also Sees Short-Term Setbacks Ending Soon
"Many Creditors Are Long-Term Holders and Early Adopters"

A notice regarding creditor repayments posted on the official Mt. Gox website on the 24th (local time). It includes information that Bitcoin repayments will begin in early July this year. Photo by Mt. Gox website capture

"How long do we have to suffer because of Mt. Gox?" (Bitcoin investor Mr. A)

The Japanese virtual asset exchange Mt. Gox, which went bankrupt in 2014, announced that it will begin Bitcoin repayments this July. This comes 10 years after the exchange's bankruptcy. Due to concerns that creditor volumes will flood the market, Bitcoin prices briefly fell below $60,000 during trading on the 25th. The expected volume to be released into the market is approximately $9 billion (about 12.4 trillion KRW). While some analysts argue that the concerns are excessive, it is expected that market fluctuations will be unavoidable for the time being.

According to the global virtual asset market tracking site CoinMarketCap, as of 8:15 PM on the 29th (Korean time), Bitcoin is trading at $60,860.30, down 0.94% from the previous day. Compared to a week ago, it has dropped 5.32%, and compared to a month ago, it has fallen 10.21%. The year-over-year increase is 98.59%.

Last week's Bitcoin decline was triggered by negative news related to Mt. Gox, the Japanese virtual asset exchange that went bankrupt due to hacking in 2014. On the 24th (local time), Mt. Gox announced on its official website that "Nobuyaki Kobayashi, the trustee and bankruptcy administrator of Mt. Gox, will begin repaying creditors with Bitcoin and Bitcoin Cash starting early July 2024." This is earlier than the initially announced date of October 31. Virtual asset specialized media such as THE BLOCK have predicted that 140,000 Bitcoins will be released into the market, equivalent to about $9 billion (approximately 12.4 trillion KRW).

Mt. Gox was one of the early virtual asset exchanges headquartered in Tokyo, Japan, established in 2010. At one point, it accounted for about 70% of all Bitcoin transactions. It went bankrupt in 2014 after losing 850,000 Bitcoins of customer entrusted assets and 100,000 Bitcoins it held itself due to hacking. The bankruptcy procedures and compensation processes are still ongoing. Since the exchange's bankruptcy in 2014, Nobuyaki Kobayashi has served as the trustee and bankruptcy administrator of Mt. Gox, handling creditor repayment duties.

Since the Mt. Gox bankruptcy, there has been a persistent fear in the market about when creditor volumes might flood the market. In fact, immediately after this news was announced, Bitcoin prices briefly dropped to the $59,000 range during trading on the 25th.

However, Brian Dickson of the hedge fund Off The Chain Capital, which purchased Mt. Gox claims, stated that the Bitcoins acquired will be sold "very systematically." Alex Sohn, Head of Research at the virtual asset asset management firm Galaxy Digital, also explained that "the selling pressure from Mt. Gox is expected to be less than anticipated," adding that "analysis shows that the pressure to sell Bitcoin in the market will potentially decrease." In particular, Alex Sohn highlighted that Mt. Gox creditors are long-term Bitcoin holders and tech-savvy early adopters. He argued that they are more likely to hold onto the distributed coins rather than sell them, preferring to maintain their Bitcoin holdings.

According to the virtual asset data provider Alternative, as of this day, the Fear & Greed Index, which expresses investor sentiment as an index, stands at 30 points (Fear). This is the same rating as last week's 53 points (Neutral), but the index difference is significant. Alternative's Fear & Greed Index means that a score closer to 0 indicates extreme fear and pessimism about investing, while a score near 100 indicates optimism.