Mount Gox to Start Distributing Stolen BTC from 2014 Hack in July 2024
Mount Gox has announced that it is preparing to begin distributing Bitcoin (BTC) and Bitcoin Cash (BCH) stolen from customers during the 2014 hack, starting in the first week of July.
The announcement has raised concerns about a massive sell-off pressure on Bitcoin, with some traders and investors believing that these fears are exaggerated.
Mount Gox’s repayment plan includes the distribution of 142,000 BTC ($8.6 billion) and 143,000 BCH ($500 million), as well as fiat currency totaling 69 billion Japanese yen ($432 million).
Traders’ Analysis and Perspectives on the Mt. Gox Case
Crypto traders believe that the selling pressure resulting from Mount Gox’s repayments may be much less significant than market observers fear. According to Sam Callahan, Senior Analyst at Swan Bitcoin, the impact on the Bitcoin price is likely overstated.
He explains that creditors who wanted to sell their bitcoins had more than 10 years to do so by selling their bankruptcy claims to more conviction and long-term investors. Moreover, he believes the majority of creditors are likely to hold onto their BTC as their cost basis is below $700 per bitcoin.
Distribution of Mt. Gox’s BTC
According to a note from Galaxy Research, out of the 141,000 BTC intended for distribution, 65,000 BTC will be delivered to individual creditors, while 30,000 BTC will be allocated to claim funds and a separate bankruptcy.
Galaxy Research estimates that most of the BTC received by the acquiring claim funds will be distributed in kind to limited partners (LPs) and will not be sold, thus alleviating concerns of a massive sell-off.
Bitcoin’s Price Drop and Diminished Dominance
Mount Gox’s announcement immediately led to a more than 4% drop in the price of Bitcoin on Monday, pushing it below $60,000 for the first time since early May. This decline also resulted in a decrease in Bitcoin’s dominance in the cryptocurrency market. Bitcoin’s dominance, or its share of the total cryptocurrency market value, fell by 1.8% to reach 54.34%, the largest one-day drop since January 12.
Although some concerns remain, many observers believe that the actual selling pressure from Mount Gox’s repayments may be more moderate. In a market note, Tagus Capital highlighted that Mount Gox’s creditors may prefer to hold onto their BTC rather than sell, as they are long-term investors who have resisted dollar payment offers in the past and could face capital gains taxes upon selling.
