🛝 Here's what Mt. Gox bitcoin repayments mean for crypto markets
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Crypto markets are reeling as the long-dreaded Mt. Gox BTC starts moving to third parties for repayment to former users of the defunct exchange.
Why it matters: It's billions of dollars' worth of bitcoin that could go out for sale, dampening price.
- The market has long feared the return of this giant stash.
- About $2.5 billion (at Friday's price) of BTC moved Friday. There's about another $5 billion worth to go.
The latest: Bitcoin is down 10% over the last seven days, according to CoinGecko.
- At least a couple of users in the mtgoxinsolvency subreddit said they are getting BTC. These appear to be creditors in Japan (where Mt. Gox was based).
- There has been reporting that the impact of Mt. Gox's distribution will be less than anticipated.
Zoom in: On June 24, the Mt. Gox website posted a notice that distributions would begin in early July. Friday, it wrote that some repayments have begun, but that it's waiting on several conditions to be met for others.
- It did not say which ones had not met the conditions.
- Axios contacted Kraken, Bitstamp and BitGo, three of the known redistribution partners. Of those, only BitGo has replied at press time, declining to comment.
- Mt. Gox's statement Friday ended by saying, "We ask eligible rehabilitation creditors to wait for a while."
Catch up fast: Mt. Gox was the most popular exchange in the world for trading BTC until it became insolvent and shut down in 2014.
- During bankruptcy, thousands of BTC were found.
- These were not enough to replace all the BTC the exchange lost, causing the shutdown, but in the intervening decade, that stash's value ballooned in dollar terms.
What they're saying: "Got all my coins 2 hours ago. Japanese exchange. Sold my cost basis and was able to initiate a bank transfer. Will hodl the rest while I figure out a tax minimization strategy. Going to miss this sub....?" Reddit user heartface wrote this morning in the subreddit devoted to waiting for refunds.
- "Goodbye friend I hope to never see you again the best possible way 😁," user ValdemarrPlanB, replied.
Zoom out: Some other large caches of bitcoin are also moving around. The U.S. and German governments have sent over $700 million worth of bitcoin to trading venues, suggesting they could be preparing to sell.
- The whole market is red.
What we're watching: When and if prices recover. Is this a short-term panic or does the new supply dampen the mood out there?
- The most popular strike price for BTC future calls on Dec. 27 is still $100,000 on Deribit.
