The exchange published a compensation plan for its creditors, who must choose between cash, BTC, or BCH. Some analysts fear this situation will cause BTC to flood the market and the price to crash.
The bankruptcy trustee of the cryptocurrency exchange Mt. Gox stated that the victims of its collapse would get their funds back soon. That platform was once the largest worldwide but crashed in 2014 after losing around 850,000 BTC.
The creditors must register online and choose how they want to receive their funds. The options include payment in cash, Bitcoin (BTC) itself, or Bitcoin Cash (BCH). Many analysts fear that the price will drop even further if they opt for Bitcoin, as around 142,000 BTC would hit the market.
According to cryptocurrency investor Aaron Brown, some of the victims of the Mt. Gox collapse will get Bitcoin, which they could sell. He noted that this could drive prices down despite not being a significant fraction of the total trading volume of the cryptocurrency. That decrease might cause fear among other people and thus lead to a further fall.
The Attorney of Mt. Gox Sends a Letter to the Creditors
The creditors of Mt. Gox received correspondence from attorney Nobuaki Kobayashi, the trustee of the rehabilitation process. He confirmed that the exchange was preparing to pay the affected account holders.
The letter stated that the Rehabilitation Trustee would set the deadline for the Election and Registration with the permission of the Court.
Many creditors might exchange their BTC on the market for cash, directly or indirectly. The trustee would purportedly settle an equivalent amount of BTC to pay those who wish to receive fiat currency.
The Present Value of the Bitcoin Lost by Mt. Gox in 2014
The lost Bitcoin was worth about USD 500 million in 2014, but those 850,000 units are now worth more than USD 18 billion. The exchange has recovered some of the misplaced coins over the years.
Ripple co-founder Jed McCaleb launched Mt. Gox in 2009 as a cryptocurrency trading platform. It became the largest in the world, liquidating 60% of global BTC sales in 2013, the year before it went bankrupt.
As the Price Falls, More Bitcoin Hits the Market
Several analysts and enthusiasts point out that the Mt. Gox plan comes at a complicated time for the market. The victims will be able to receive compensation seven years after the crash, but that could backfire on the price of Bitcoin.
The Bitcoin received by those compensated could hit the market during this bearish period. That would increase the supply, leading to a drop in the price of BTC, which would also affect the leading altcoins.
Despite the fear of the arrival of more Bitcoin on the market, several ruled out a detrimental effect when speaking of the rehabilitation plan. However, the price of BTC dropped by more than 60%, compared to the all-time highs of November 2021.
Bitcoin is trading at around USD 21,487 and has accumulated a USD 10.6% gain in the past week. While its trading volume is above USD 47.23 billion, its market capitalization is about USD 410.18 billion, according to CoinGecko.
By Alexander Salazar
