Gox announced the start of payments. What awaits the crypto market?

Exchange administrator Mt.Gox, which went bankrupt in 2014, announced plans to start paying compensation in Bitcoin, Bitcoin Cash and cash in early July.

The decision was made upon completion of the preparatory process, including providing technical support, complying with each country’s rules, and coordinating transfers with each cryptocurrency exchange.

Payments will start in order of arrival to the platforms that confirmed the required information.

“We take time to ensure safe and reliable repayment to lenders, including technical solutions for safe repayments, compliance with each country’s financial regulations, and discussing repayment agreements with cryptocurrency exchanges.”

Mt.Gox Debtors

The market reacted nervously to the publication of the news. Bitcoin (Bitcoin) fell below the $62,000 level. The drop in the value of BTC led to a drop in the quotes of other cryptocurrencies in the TOP 10 by market capitalization.

Mt.Gox bankruptcy

Gox was one of the largest cryptocurrency exchanges in the world, operating from 2010 until it filed for bankruptcy in 2014 following hacker attacks. At its peak, Mt. Gox accounted for about 70% of the total Bitcoin volume of business. In a 2014 hack, 850,000 BTC were stolen. Its current value is more than US$57 billion.

The process of agreeing payments to the failed exchange Mt. Gox began in June 2018. In 2021, a court approved a compensation plan developed by the company’s administrator.

In December 2020, a plan was introduced to pay creditors in fiat currency, Bitcoin and Bitcoin Cash (BCH). Details of the plan were made public in January 2021 and received court approval in February for a subsequent vote. The compensation plan was supported by around 83% of the exchange’s users.

The exchange’s bankruptcy led to a seven-and-a-half-year legal battle before a plan was implemented to refund affected users in 2021. As not all of the stolen coins were recovered, customers will only be compensated for a portion of the original amount. . value – 142,000 BTC, 143,000 BCH and 69 billion Japanese yen.

In December 2023, Mt. Gox customers reported return the money ten years after the collapse. Amid posts on social media by anonymous users about receiving funds, the Bitcoin rate fell by 4.5%.

At the end of May, the Bitcoin rate fell to US$67,500 amid news of the movement of Mt. Gox assets for around US$3 billion, intended to pay customers for the bankrupt exchange. Market participants fear that the exchange’s clients, having received billions of dollars in compensation, will begin selling them, impacting the market.

$9 billion Bitcoin payment

Bitcoin fell 3% after exchange manager Mt. Gox, which went bankrupt in 2014, announced plans to start paying compensation in early July. The price of the top cryptocurrency fell below $58,000, recovering above the $61,000 level at the time of writing.

Source: CoinMarketCap

Despite concerns about Mt. Gox Bitcoin, there may be broader reasons for the volatility in the crypto market. News of the distribution of bitcoins to creditors comes amid an investment outflow from bitcoin-traded funds. Capital losses from regulated crypto funds exceeded $500 million for a second week. This is the highest value in two weeks since the adoption of Bitcoin spot ETFs In the USA

What market participants are saying

According to CoinShares Chief analyst James Butterfill, the movement of funds of funds at this pace indicates the start of a real correction.

Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets, awake with his opinion. She believes that bearish sentiment is setting in and that the market is having difficulty digesting large sell orders.

Others see this market behavior as a short-term correction at the start of a bull market. Blockstream boss Adam Back I asked myself why creditors have already waited ten years for compensation.

“It would be a strange time to sell at the start of a bull market.”

Adam Back, CEO of Blockstream Corp.

In May, Galaxy Digital also estimated by 75% the share of coins returned by the platform administrator, whose owners preferred to receive an advance payment in kind at a discount.

While the market may believe that almost all of the 141,868 BTC will enter circulation this year, analysts believe that the amount will be significantly less. 64,697 BTC is expected to go to individual creditors and another 30,000 BTC to claim funds and participants in a separate bankruptcy.

Galaxy Research head Alex Thorn clarified that 20,000 lenders from a pool of nearly 65,000 BTC are early adopters of digital gold who have historically held it (11% of supply has not moved in over five years).

The expert notes that the majority in this category purchased Bitcoin for $451 or less – they have remained holders despite several decade-long bear markets.

What will happen to Bitcoin in July?

According to Mark Cullen, Bitcoin will continue to decline in July. He believes that BTC’s positive momentum could be followed by a drop to new local lows. The analyst does not rule out a drop in Bitcoin to US$57,000 in early July. At the designated level, according to his observations, there is a liquidity pool that can act as a magnet for the crypto rate.

Trader Doctor Profit agreed with the prediction, implying a Bitcoin decline to $57,000. Unlike Mark Cullen, he is confident that BTC is already close to reaching a local minimum, which will be followed by an update to the absolute maximum.

The trader is sure that the current drawdown should be used to buy cheap bitcoins.

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