Title: Mt.Gox Tokens on the Move: Potential Impact on the Market
Introduction:
After five years of silence, Mt.Gox-related addresses have begun transferring large amounts of Bitcoin, ranging from thousands to tens of thousands of coins. With Mt.Gox’s current Bitcoin holdings totaling 141,680 coins, worth nearly billions of dollars, concerns about potential selling pressure have arisen in the market. As a result, Bitcoin’s price dropped from a low of 69,400 USDT to 67,500 USDT yesterday morning. This article will analyze the potential impact of the Mt.Gox incident on the market.
Compensation Plan Details:
The first question that users are most concerned about is whether the transfer of tokens by Mt.Gox after all these years is for the purpose of selling. According to the documents released by Mt.Gox, the transfer was confirmed to be in preparation for the repayment deadline of creditors on October 31st. The Rehabilitation Trustee is currently preparing for the distribution of cryptocurrency as part of the claims. There are two compensation plans: Plan 1 involves repaying BTC and BCH to creditors on designated exchanges, while Plan 2 involves selling the tokens and then repaying. As of now, the Rehabilitation Trustee has not specified which plan will be followed for compensation.
Earlier on April 21st, a Reddit user reported that the Mt.Gox claim form had been updated to include fields for estimated token recovery amounts, displaying BCH and BTC codes as well. In January of this year, some creditors received emails requesting them to confirm their account information and were warned that if their accounts were disabled or frozen in the future, they might not receive BTC/BCH repayments. This indicates that Mt.Gox is at least moving towards payment in BTC form, rather than solely focusing on fiat payments. However, most users believe that there is no direct connection between the updated form and compensation payments.
From this, it can be inferred that BTC does indeed face selling pressure from Mt.Gox, but it is currently unknown whether this plan will be chosen and what the specific selling quantities will be.
Selling Pressure Analysis:
The total amount of BTC transferred by Mt.Gox this time is 141,680 coins, which have been sent to multiple addresses. The details can be found in the report by Odaily. However, the total amount of sales, as mentioned in the previous section, is currently unknown. Alex Thorn, the Head of Research at Galaxy Digital, stated, “I personally expect that most Bitcoin will be held, but I cannot say the same for BCH. Not all tokens will be sold.”
Regarding the timing of sales, Mark Karpelès, the former CEO of Mt.Gox, stated on the X platform, “As far as I know, everything is normal at Mt.Gox. The trustee is transferring the tokens to another wallet in preparation for potential distribution this year, and Bitcoin will not be sold immediately.” The official deadline for final repayment is October 31, 2024, leaving a significant amount of time.
Furthermore, in terms of the sales details, according to Mt.Gox’s official announcement in January 2023, the compensation plan provided by Mt.Gox is divided into two categories: “Base Repayment” and “Proportional Repayment.” The amount of the base repayment is the same, while the proportional repayment offers two options for creditors, namely “Mid-term and Final Repayment” or “Early Lump Sum Repayment.” In other words, if the option to sell tokens is chosen, it will not be a rapid sell-off in the short term, but rather a gradual sale over a longer period, similar to the GBTC selling pressure.
Conclusion:
In conclusion, the token transfer action by Mt.Gox represents a potential for token selling pressure to some extent. However, the final outcome is still uncertain. Even if the selling plan is chosen, it will be gradually absorbed over a long period of time, making it unlikely to cause a market crash directly.