$9 Billion Earthquake: Bitcoin Briefly Price Crashes Below $60,000 as Mt. Gox Unveils Massive BTC Repayments

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As a long-term crypto investor with experience in the market since its early days, I’ve seen my fair share of ups and downs. The latest news about Mt. Gox distributing recovered Bitcoin and Bitcoin Cash to creditors has left me feeling cautious but not overly concerned.

The value of Bitcoin ($BTC) fell below $60,000 for the first instance since May, prompted by Mt. Gox’s declaration of distributing massive amounts of Bitcoin and Bitcoin Cash to its previous clients.)

As a crypto investor, I can tell you that before its collapse in 2014, Mt. Gox was the undisputed leader in Bitcoin exchanges worldwide. However, the exchange suffered a string of hacking incidents that resulted in the theft of approximately 850,000 Bitcoins. The consequences of these breaches left many investors in a difficult position. After years of arduous legal proceedings, Mt. Gox was able to recover around 140,000 Bitcoins, providing some level of compensation for the wronged creditors.

Trustee Nobuaki Kobayashi unveiled a plan for distributing recovered Bitcoin and Bitcoin Cash to creditors next month. The Bitcoin Cash, obtained due to the 2017 blockchain fork, will be handed out via partner cryptocurrency exchanges such as Kraken, Bitstamp, and BitGo.

As an analyst, I’d rephrase it as follows: The recent news caused ripples in the cryptocurrency market, triggering a significant price decline. There’s a strong belief among experts that the BTC, valued between $65,000 and $140,000 with a total worth of around $9 billion, might be offloaded by creditors who have patiently waited for over a decade to recoup their investments.

In the past 24 hours, data from CoinGlass indicates that more than $100 million in Bitcoin long and short positions were terminated due to the market’s volatility. This turbulence caused Bitcoin’s price to plummet to a low of $58,000 before rebounding to its current level of $61,300.

According to some analysts, the anticipated impact might be exaggerated. Alex Thorn, the research chief at Galaxy Digital, posits that approximately 65,000 Bitcoins will be allocated to individual creditors. Many of these creditors are early adopters who are unlikely to sell their Bitcoins in large quantities.

Creditors opted for an early payout, resulting in a roughly 10% reduction in the original amount due. Approximately 75% of all Bitcoins (around 95,000 coins) were chosen by their owners for this option. Out of this sum, around 20,000 coins are allocated to claims funds and another 10,000 coins to Bitcoinica BK. The remaining approximately 65,000 coins will be distributed among individual creditors.

— Alex Thorn (@intangiblecoins) June 24, 2024

Creditors who purchased Bitcoin at a lower price than its current value should be aware that selling it right away could result in substantial capital gains taxes due to the price increase.

According to Thorn’s analysis, the larger claim funds and a distinct bankruptcy procedure are predicted to receive the remaining Bitcoin tokens. As for Bitcoin Cash, which emerged as a branch from the initial Bitcoin blockchain, it is anticipated to experience a more pronounced downturn due to its smaller liquidity pool and possibly decreased appeal among the original Bitcoin holders.

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2024-06-25 15:44