Mt. Gox, the defunct bitcoin exchange, is set to repay its creditors roughly $9 billion worth of crypto after a decade-long wait. The payout comes after a cyber theft of up to 950,000 bitcoin in 2011, which led to the exchange’s bankruptcy. Bitcoin is now trading at over $60,000, an increase of more than 10,000% from the time of Mt. Gox’s bankruptcy.
Bitcoin’s price surge
The repayment process is set to begin in July, and creditors are expected to receive a mix of bitcoin and bitcoin cash. According to Alex Thorn, head of research at crypto asset management firm Galaxy Digital, the vast majority of creditors have said they will take a payout in-kind, meaning in cryptocurrency rather than fiat.
Mt. Gox logo
Mt. Gox was once the largest spot bitcoin exchange in the world, claiming to handle around 80% of all global dollar trades for bitcoin. However, the exchange shuttered in February 2014 after a series of heists. Mt. Gox blamed the bitcoin disappearance on a bug in the cryptocurrency’s framework.
Bitcoin mining
John Glover, chief investment officer of crypto lending firm Ledn, said creditors are about to get a historic windfall. “Many will clearly cash out and enjoy the fact that having their assets stuck in the Mt. Gox bankruptcy was the best investment they ever made,” Glover said.
Bitcoin wallet
However, not all creditors are expected to cash out immediately. Some may choose to hold on to their bitcoin, hoping for further price gains. According to JPMorgan Chase analysts, the potential for heavy selling from Mt. Gox creditors creates “downside risk” next month, though it would be short-lived.
Bitcoin’s price trajectory
The repayment process is a significant milestone for the cryptocurrency industry, and it will be interesting to see how creditors choose to use their newfound wealth. Will they cash out and enjoy their profits, or will they hold on to their bitcoin, hoping for further gains?
Bitcoin logo
