Mt. Gox Refund Fears: Fair or Unfounded?

Yesterday, Mt. Gox, the notorious cryptocurrency exchange that filed for bankruptcy in 2014, announced it will start refunding customers. This development involves nearly $10 billion worth of bitcoin (BTC) and bitcoin cash (BCH), leading to widespread anxiety. The bitcoin price plummeted to below $59,000 as a result.

The fear is that a large portion of the refunded bitcoin will flood the market, causing prices to fall. However, experts dispute this notion.

Mt. Gox, once the world’s largest Bitcoin exchange, collapsed in 2014 after a hack resulted in the loss of approximately 850,000 BTC. Creditors have been waiting for repayments ever since. Starting next week, the process by which these creditors will receive their bitcoin back will finally begin.

Experts argue that the payouts will be gradual, and the impact on the market will be limited. Analysts at IG Markets point out that the sales of Mt. Gox tokens are already factored into the price. It is an event that has been expected for years, after all.

Galaxy’s head of research, Alex Thorn, shares similar doubts about the impact of the Mt. Gox refunds. He believes that not all bitcoin will immediately end up on the market and that fewer coins will be distributed than expected. In fact, he estimates that only 65,000 of the total 140,000 bitcoin will be paid out to regular creditors.

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