Approximately $9.2 billion in Bitcoin could increase circulating supply over the next 6 months through the redemption of Mt. Gox, threatening the rise of the crypto market.

$9.2 Billion Bitcoin About to Be Refunded by Mt. Gox threatens the rise of the crypto market?

As reported, after a decade of waiting, creditors of the Mt. Gox collapse appears to be closer to recouping its $9.2 billion in lost investments. This is great news for them, but not so good for other cryptocurrency investors.

The balance sheet from 2019 shows that the defunct cryptocurrency exchange had nearly 142,000 Bitcoin to pay creditors. That means nearly $9.2 billion in Bitcoin (at a value of $64,000/Bitcoin at the time of writing) could be sold any time before October 31, 2024, Mt. . Gox.

However, crypto analysts say Bitcoin Maxis and Bitcoin HODLers can "save" the market from collapse.

Difficult refund methods have a big impact on Bitcoin price

Brian Redick, senior strategist at crypto trading firm GSR, said that "its impact on the crypto market may depend on how the funds are returned".

First of all, the timing of the repayments is uncertain, and they are all due October 31, but it is possible that they will not be paid at the same time. Refunds are divided into three categories:

• Basic return;
• Refund ahead of schedule in installments;
• Refund through intermediary.

According to the balance sheet, the trustee of Mt. Gox currently holds 142,000 BTC, 143,000 BCH and 69 billion Japanese yen (equivalent to 510 million USD). The first 200,000 yen will be paid in Japanese yen, then in crypto - if the creditor chooses to receive it in crypto. Crypto payouts consist of 71% coins (BTC and BCH) and 21% cash.

David Duong, Research Director at Coinbase commented:

“A massive Bitcoin sell-off event is unlikely. But concerns around these refunds could still limit liquidity as market traders may avoid deploying new capital in the near future. uncertain context."

Much of the wealth is trapped in Mt. Gox are all part of "Bitcoin Maxis"

Brad Howell, CEO of cryptocurrency investment fund Keyrock UK, said that the problem of Mt. Gox is not something to worry about as the market can easily absorb this $9 billion worth of selling pressure.

Mr. Howell's comments are completely well-founded when the latest data from CoinMarketCap shows that Bitcoin's average daily trading volume is currently nearly 30 billion USD.

Mr. Howell urged people to "tone down" negative thoughts about the impact of Mt. Gox to the market, they are just emotional opinions. Let's put ourselves in the mindset of those people who have a large amount of Bitcoin, but most of them follow the "Bitcoin Maxis" ideology.

“Just think, anyone whose assets are stuck in Mt. Gox are all early holders and tend to lean towards the ‘Bitcoin maxis’ camp. Don't expect large volumes of Bitcoin to sell off on day one.”

Sharing the same view as Brad Howell, CEO of Off The Chain Capital is Brian Dixon, a cryptocurrency hedge fund that has purchased interests in Mt. Gox, in an exclusive interview with Bloomberg, said it will "carefully consider" selling the Bitcoin it receives, "we probably won't sell all the BTC at once."

Mr. Dixon even plans to buy more Bitcoin and some other cryptocurrencies when the market adjusts down, because that gives his investment fund a superior advantage. The fund has $360 million in assets and its position in Mt. Gox accounts for nearly 20% of the fund.

Founded in 2010 by American programmer Jed McCaleb (who later became the "father" of two other famous cryptocurrencies, Ripple and Stellar Lumens), Mt.Gox used to be a Bitcoin exchange. largest globally until the exchange was hacked in 2014, resulting in 850,000 Bitcoins "disappearing". In June 2023, the US charged two Russian citizens with masterminding the hack of Mt. Gox, was indicted on charges of theft and money laundering, specifically here 647,000 Bitcoin (more than 17 billion USD) from the Mt. Gox.

After reaching an all-time peak price of $73,777 in March thanks largely to cash flow from approved Bitcoin spot ETFs, Bitcoin has corrected by about 19% to around the $59,600 mark due to war tensions. in the Middle East, along with concerns about the US Federal Reserve's (Fed) potential interest rate cuts becoming more doubtful after the latest US CPI index was higher than expected.