Bitcoin's Mt. Gox overhang looks ready to fall

It is hard to imagine bitcoin price doesn't take a tumble if the Mt. Gox estate really starts distributing part of its $9 billion mountain of BTC over the next month.

Why it matters: The Mt. Gox collapse is one of the oldest unpaid bills in cryptocurrency.

Catch up fast: The Japan-based bitcoin exchange was once the largest spot in the world for bitcoin trading, but it shut down in 2014 after sundry catastrophes.

• When the digital smoke cleared, it still had about 15% of its customers' bitcoins. After a process that has unwound over the course of a decade, users of the exchange, digital asset investment firm Galaxy believes, look likely to get repaid before July.

That means most of the $9 billion worth of bitcoin that has been sitting idle for a very long time will hit the market, and there's just no way that doesn't have some impact on price.

The other side: In a note shared with Axios, Galaxy's research chief Alex Thorn said that his conversations with major Mt. Gox creditors have led him to believe that the market is more worried about massive sales of bitcoin than it should be.

• "Our impression is that this cohort is mostly long-term Bitcoiners, even more ideologically pro-Bitcoin than the broader Bitcoin holder base today," Thorn wrote.

How it works: Those owed bitcoin by Mt. Gox will need to have accounts on Kraken, BitGo or Bitstamp.

• The estate will send BTC to each of those organizations and they will distribute them to their users.
• Not all of the bitcoin will be distributed. Only those who opted for an "early" distribution, with a small haircut.

Galaxy estimates that 65,000 BTC (of the 141,000 held by the estate) will be distributed soon.

The big picture: FTX customers are getting cash, not crypto — and much less cash than crypto holdings would be worth now.

• Mt. Gox customers are getting bitcoin, but way less than they once held. Yet, it's been so long that whatever they get will be worth wildly more than whatever they had then.

Reality check: Mt. Gox distributions represent a metric ton of bitcoin, and some are going to sell at least a bit of it.

• Plus, the market will know that this BTC is no longer under lock and key.

Fun fact: A few years after Mt. Gox crashed, bitcoin cash (BCH) was created (it's a long story).

• Every single holder of BTC got an equal amount of BCH on that day. So the Mt. Gox estate also has 141,000 BCH, worth approximately $66 million today.
• Mt. Gox creditors will also get their shares of BCH.

💭 Our thought bubble: These folks may be long-term bitcoiners, but they are going to dump that BCH immediately.