There’s an igniting curiosity around the rapidly approaching Mt. Gox repayment deadline Bitcoin (BTC) might be in for a tumultuous ride, a spirited discussion among crypto observers suggests. To recount the backstory, Mt. Gox had previously been the biggest Bitcoin exchange worldwide, hitting a stride at 70% of all Bitcoin transactions until its sudden implosion in 2014. In a spectacular security breach, around 850,000 BTC, equal to 4% of all Bitcoin existing at the time, disappeared into thin air, pushing Mt. Gox into the realm of the most disastrous cryptocurrency bankruptcies. Even now, after nearly a decade, creditors are still waiting for their dues.
The judgment day for these long-awaiting creditors is finally close at hand, with the repayment deadline set only three months away. This might just lead to a significant price drop in Bitcoin’s future value, and here’s why – the repayment could give rise to an onslaught of sell orders as creditors take advantage of finally retrieving their BTC shares. As Jacob King, founder of WhaleWire, points out, this increase in selling may produce a downward pressure on prices, potentially leading to a market downturn.
Doubts arise about investor intentions after the repayment. Most creditors may likely sell at least a part of their BTC upon regaining it. Consequently, the market would face a deluge of digital currency, sparking fears of a possible downturn. King also cited the numerous delays in the Mt. Gox repayment process that have generated disillusionment among investors, causing faith in the market to wane. Yet, some suggest claimants might continue to HODL, adding further complexity to possible market outcomes.
How much is due for repayment, you might wonder? Reports suggest a projected compensation of 142,000 BTC and 143,000 of the forked cryptocurrency BCH (Bitcoin Cash) to creditors. The financial restitution will also include 69 million Japanese Yen. Through a combination of fiat currency and cryptocurrencies, each payout will be individually coordinated with the investor.
Some skeptical experts like Mati Greenspan from Quantum Economics believe the repercussions of this major event will likely diminish quickly. After all, Greenspan points out that the volume of Bitcoin that will be repaid is small in the grand scheme of things. Drawing a comparison with Bitcoin advocate Michael Saylor’s BTC holdings, which stands at 152,333 BTC, the potential effects could be easily absorbed by the market in a short time.
In conclusion, as the Mt. Gox repayment date looms closer and closer, the crypto community is on edge, keeping a vigilant eye on any potential domino effect. But whether this event will mark a spectacular triumph or a dreaded downfall, only time will tell. Until then, the world continues to patiently watch the unpredictable play of the crypto market unfold.
Source: Cointelegraph
