Cryptocurrency Market in Turmoil as MtGox Begins 9 Billion Payout

CoinWorld reports:
Nearly a decade after the platform’s bankruptcy, the controversial Bitcoin exchange Mt.Gox has caused a stir in the market as the company and individuals prepare to receive compensation.
The government overseeing Mt.Gox’s payment plan will distribute $9 billion worth of Bitcoin and Bitcoin Cash to users who lost funds when the platform was last hacked in July 2014.
News of Mt.Gox’s loss of coins from the 2014 era on its exchange led to a sharp drop in token prices.
Bitcoin has depreciated by 20% in the past month, currently trading at $55,248. Meanwhile, Ethereum has fallen below the $3,000 mark, trading at $2,950, also down 20% in the past 30 days.
Most analysts agree that the market’s sell-off woes are triggered by Mt.Gox’s disbursements and the possibility of tens of thousands of coins entering the market.
When the platform collapsed in July 2014, Bitcoin was priced at $600, which means that investors are eyeing potential profits of up to 10,000% in today’s value.
Nonetheless, some remain optimistic that the cryptocurrency market will overcome the looming threat.
Rennick Palley, founding partner of early-stage venture capital firm Stratos, said, “The return of Mt Gox coins is causing the chaos we see today and may lead to short-term weakness in BTC, but in the long term, it will be a positive factor—concerns about the listing of Mt Gox coins have always been a hanging issue for BTC long-term success.”
Qualified companies
There are five companies that are eligible recipients of Mt.Gox-era coins, responsible for redistributing the funds to individuals who incurred losses in the initial bankruptcy: Bitstamp, Bitgo, Kraken, Bitbank, and SBI VC Trade.
However, despite the trustee responsible for disbursing Mt.Gox funds issuing a notice on June 24 that the funds will start flowing in early July, details on which companies will receive the tokens first remain unclear, as well as how these companies will distribute the cryptocurrencies they receive.
On July 4, PeckShield warned that an address related to Mt.Gox transferred 47,000 bitcoins ($2.7 billion) to a new address, while also transferring 1,544 bitcoins ($84 million) to the aforementioned Bitbank. One day later, Mt.Gox sent 1,200 bitcoins ($64 million) to another new address.
While Bitbank has yet to confirm these expenditures, data from Arcane Intelligence suggests that the company has begun moving these funds into wallets. A wallet associated with the Japanese company showed a significant amount of bitcoin transfers over the weekend, ranging from less than 1 bitcoin to 90 bitcoins.
Although the market is concerned that the recipients of the funds will sell these coins, some analysts state that not everyone will sell.
Phillip Alexeev, Chief Growth Officer at CrossFi, said, “While a substantial portion of the repaid tokens will undoubtedly be sold, I expect experienced whales to remain in the game until the forthcoming bull market.” He told The Defiant that investors have managed to survive for years without these funds and can continue to wait until their returns are maximized, unless they are absolutely desperate.