News / The Mt. Gox Payout: How Will It Affect Bitcoin (BTC)

The Mt. Gox Payout: How Will It Affect Bitcoin (BTC)


The payout of cash, Bitcoin (BTC) and Bitcoin Cash (BCH) for traders that had their coins on the Mt. Gox exchange back in 2013 is now imminent. The Tokyo-based exchange, which was arguably behind the BTC rally to $1,000, also caused the coin’s first crash. 

After being taken in custody, the coins were held for years while the Japanese court debated how to compensate the traders. The Mt. Gox coins are held in a known wallet, and reportedly contain around 141,000 BTC. 

What is the Worst-Case Scenario

The current agreement reached is that Mt. Gox traders will be paid partially in cash and BTC, based on their exchange balance before Mt. Gox closed. One of the worst scenarios is that the coins will be shed on the market and tank BTC prices. 

The BTC market is much more liquid in 2021, and it is not impossible for it to absorb some of the sales. Over the years, this scenario has been rolled out multiple times, including during selling sprees that have allegedly originated with the partial sale of some of the Mt. Gox holdings. 

The amount of BTC on the exchange is close to the biggest wallets of Binance or other centralized exchanges. 

The Exact Number of Coins Established

The BTC held on Mt. Gox since the start of 2014 has remained mostly unmoved ever since. Recently, a more accurate picture of the lost coins emerged. 

In theory, those coins will have an interesting history and a track record that would link back to the Mt. Gox wallet on the blockchain. The blockchain history itself may prove to be valuable, at least to NFT project creators. 

BitBlocks, for instance, set out to visualize and sell some of the most notorious BTC transactions. 

The project could also create visualizations for all the funds flowing out of Mt. Gox and into user wallets.

BTC Still Can’t Return Above $60K Levels

BTC sank under $60,000 and has established a range under $57,000 in the past week. At there price conditions, the leading coin is open to bearish attacks. 

End of November futures expiration may also lead to last-minute pressure from both bulls and bears, attempting to not allow the futures to expire in unfavorable pricing. 

BTC also lost its market cap dominance against altcoins, sinking to 41.7%. Trading sentiment has shifted to fear, as the last month of 2021 approaches with unexpected price weakness. The shaky position on ETF approvals also cut into the previous optimism. 

Can Mt. Gox Traders Continue to Hold 

The BTC traded on Mt. Gox has been acquired at prices between $100 and $1,000. Over the years, the Mt. Gox assigned trustee made attempts to liquidate some of the coins and return the proceeds. However, the creditors fought to have their funds returned in actual BTC sent out to new wallets. 

Additionally, they also claimed the Bitcoin Cash (BCH) forked in 2017. For that reason, there are strong expectations the creditors will not rush to sell. 

In any case, the known BTC wallet for the exchange trustee will be monitored closely for any movements. Comparably, the Mt. Gox holdings are not even that significant when it comes to physical coin availability. 

Since 2013, the supply of BTC has grown from around 12M coins to nearly 19M coins. Miners alone keep a significant balance with no immediate intention to sell. But compared to Mt. Gox creditors, miners may have a real chance to flood the market if they decide to place their coins. 

In the past months, however, more and more wallets switch to long-term holding behavior. Spot BTC with little or no trading history and not linked to a KYC account or a known whitelisted wallet is expected to become more valuable. 

The expectation that all the BTC would be released exactly on November 22 turned out to be a false fear-based rumor. Initially, the creditors will receive a mix of cash and BTC, and the entire amount will be spread over a few years.

Creditors have not received new communication on their holdings since November 16, and no known social media personalities have shared any receipt of actual BTC from the exchange.

Will Ethereum Displace BTC

ETH has remained more stable over the past days, retaining 19.6% of the entire crypto market capitalization. ETH also managed to remain between $4,100 and $4,300, with some signs its price may make a move against BTC.

The Ethereum network is still a staple, with more types of decentralized projects still requiring at least some form of record-keeping or computation.

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