The infamous Mt.Gox cryptocurrency exchange has issued a notice on the repayments owed to creditors, saying they will start from July 2024.
The notice has triggered widespread panic across the cryptocurrency market. Bitcoin has plunged by 4.3% in the last 24 hours. BTC was trading at $61,275 as of 09:59 EST.
Mt.Gox Repayments Commence in July
In a letter, the Mt.Gox rehabilitation trustee announced that it plans to repay the customers from next month.
The exchange said,
The Rehabilitation Trustee will commence the repayments in Bitcoin and Bitcoin Cash in due course to the cryptocurrency exchanges with which the Rehabilitation Trustee has completed the exchange and confirmation of the required information for implementing the repayments. The repayments will be made from the beginning of July 2024.
The trustee noted that the repayment plans commence after extensive preparation. It further added that safety and compliance measures will be adhered to.
The Rehabilitation trustee will make the repayments using trading platforms. It will commence with the exchanges that have finalized the exchange of information and the confirmation of the relevant processes with the Trustee.
Mt.Gox plays a vital role in the history of Bitcoin. The exchange was once the largest cryptocurrency exchange, commanding the largest share of the Bitcoin spot market. However, it was hacked in 2014, resulting in the theft of $850,000 BTC, valued at $460M.
After a decade, the exchange users will now receive their coins back. The Rehabilitation Trustee has urged all those awaiting the repayments to wait patiently. The reimbursement will be done in BTC and BCH.
Chatter around Mt.Gox moving BTC started in May after on-chain data revealed that $2.9 billion worth of BTC belonging to the exchange was on the move.
At the time, Bitcoin also witnessed a slight price decline.
Bitcoin Tumbles
The prices of Bitcoin and most altcoins have tumbled in the expectation that the Mt.Gox reimbursements will intensify selling pressure.
According to market analyst Kyle Chase, the Mt.Gox distribution plan will see 141,868 BTC, valued at $8.5 billion, dumped into the market.
Given that the BTC will be distributed on exchanges, it could result in a significant price drop if the creditors decide to sell.
Another analyst, Daan Crypto Trades, noted that the Mt.Gox repayments will weigh down Bitcoin.
However, he noted that a similar price action may not be seen with altcoins, as Ether price will benefit from the approval of spot Ethereum exchange-traded funds (ETFs).
Bitcoin’s four-hour chart shows that the downtrend is at play, and the price could continue dropping lower due to a lack of market support.
The Relative Strength Index at 36 shows that BTC is in the oversold region. With the RSI line tipping south, there is a reduced chance of a trend reversal.
BTC faces immediate resistance at the 20-period Simple Moving Average at $61,400. The price has risen to this level, but the uptrend is weak, showing possible rejection. As such, more dips could be on the way.
