Bitcoin (BTC) has encountered a tumultuous price performance in the past months, struggling to surpass previous record levels. However, the situation may worsen as the trustee overseeing the defunct Bitcoin exchange Mt. Gox has revealed the definitive date for commencing Bitcoin and Bitcoin Cash (BCH) repayments to affected customers.
This announcement has raised concerns about the possible contribution of these customers to the ongoing selling pressure in the BTC market.
Mt. Gox Trustee Prepares For Redemption
In a recent announcement on June 24, the Mt. Gox trustee and rehabilitation debtor revealed that preparations for Bitcoin and Bitcoin Cash repayments have been underway as part of the Rehabilitation Plan.
With these preparations completed, the trustee will initiate repayments to the cryptocurrency exchanges with which the necessary information has been exchanged and confirmed. Reportedly, the repayment process is set to begin in July 2024.
The trustee claims that it has spent ample time ensuring “safe and reliable repayments” to creditors, including implementing technical measures for secure transactions, complying with financial regulations in various jurisdictions, and discussing repayment arrangements with the cryptocurrency exchanges expected to be involved in the process.
Repayments will be made in order of completion of the exchange and confirmation of the required information with the exchanges involved. Creditors have also been advised to be patient during the repayment process.
Sell Or Hold Bitcoin?
It is worth noting that a similar price drop occurred in May when news broke about Mt. Gox initiating repayments to affected customers. This development caused the BTC price to plummet from its peak of $70,600 to below the $68,000 level, preventing the cryptocurrency from retesting its all-time high (ATH) of $73,700 in mid-March.
The total amount of Bitcoin to be released remains uncertain, with estimates ranging from 142,000 BTC to 200,000 BTC. Additionally, Mt. Gox still controls 143,000 BCH and 69 billion Japanese yen, further complicating the situation.
However, Adam Back, CEO of Blockstream, previously expressed skepticism regarding the potential market dumping of BTC by Mt. Gox creditors. Back emphasized the long-term potential of Bitcoin and questioned the rationale behind selling at high prices when the market is poised for further growth.
Back further suggested that holding Bitcoin in cold storage would be a more prudent choice given the overall favorable market conditions, with the BTC price expected to continue rising in the coming months despite the current price woes.
Established in 2010, Mt. Gox was once the world’s largest Bitcoin exchange, handling approximately 70% of all BTC transactions until it fell victim to an alleged security breach in 2014. The exchange lost 850,000 BTC in the hack, resulting in one of the most significant bankruptcies in the crypto space.
Ultimately, the repayment process for Mt. Gox creditors introduces a new layer of uncertainty to the Bitcoin market, contributing to recent price fluctuations.
While concerns persist, industry experts like Adam Back underline BTC’s long-term potential, urging creditors to consider holding their Bitcoin rather than selling at current levels.
Currently, the largest cryptocurrency on the market is trading at $61,330, a steep drop of 11% in the last 30 days alone.
Featured image from DALL-E, chart from TradingView.com