Key facts:
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Since the date for the repayment became known, traders have been cautious on the price.
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It is not yet known how Mt.Gox will pay the affected users the money.
The week we are going through is, without a doubt, one of the most turbulent to be expected for the bitcoin (BTC) and cryptocurrency market in 2022. For some it may already be obvious if we notice how the main cryptocurrency had consolidated a strong rise of its price, which collapsed in a matter of hours following the publication of US inflation data that was not as positive as expected.
However, this is not the only thing that makes it a complex week, but the Series of events that might affect the price of cryptocurrencies in the coming days. For example, it is expected that tomorrow night the Merge from Ethereum, process by which the network will stop using the Proof of Work (Pow) and will process your transactions through the Proof of Participation (PoS). This event has already had repercussions between different altcoins on the market, and if it is not successful it can be a serious blow to the entire ecosystem.
Likewise, on Thursday, September 15, one of the most anticipated and controversial events in the history of Bitcoin will take place. Its regarding 140,000 BTC refund from the old exchange Mt.Gox to the more than 20 thousand victims who lost their money in a hack in 2014. It is a legal battle that has been going on for eight years and that, at last, seems to bear fruit for those who lost their savings when the Bitcoin ecosystem was just beginning. Steps.
Because they are funds that have not been mobilized for eight years and that add up to almost 3 billion dollars at the time of writing this articlethe news has generated tensions among market traders. But what is the reason for all the hype that Mt.Gox is generating regarding the price of Bitcoin and why the actions of the exchange might influence a movement in the market?
Brief history of Mt. Gox and the lost money
To understand the importance of Mt. Gox funds in the market, you have to go back a few years before Bitcoin appeared. The exchange, whose operations center was in Japan, was founded in 2007 by programmer Jeb McCaleb. Originally, Mt.Gox was created with the intention of being a web portal for trading cards of a popular game, called «Magic: The Gathering».
It would be in the year 2010 when the objective of the online page changed. At that time, McCaleb became interested in Bitcoin and decided to offer cryptocurrency exchange services as well as price quotes. The exchange became so famous and used that, to this day, it might be compared to big firms like Binance.
Holding a strong monopoly on cryptocurrency transactions, the idea of Mt. Gox was sold to the French programmer Kark Karpeles, who would take charge of the project as CEO until its spectacular end. But how did this tragedy occur? Well, despite the undisputed success of Mt.Gox, the platform had many vulnerabilities and began to present serious security flaws in 2011.
Making themselves easy targets for hackers, Mt.Gox’s fate was already sealed. For the year 2014, despite the modifications made by the directive to improve the security of the exchange, the company suffered a robbery that would shake the foundations of the cryptocurrency market. A total of 850,000 BTC were stolen from the common funds, leaving the firm in great financial trouble and thousands of people without their savings.
Filing for bankruptcy the same year, Mt. Gox rose as one of the darkest chapters in bitcoiner history. More than 20,000 users claimed their money back for years, despite the fact that the company was only able to recover 200,000 BTC from the hackers. Eight years following the first claims were raised, everything points to the fact that, finally, on September 15, users will be able to recover part of their savings.
Do we have to worry regarding the 140,000 BTC on Mt. Gox?
As we can see, Mt. Gox is a name of great weight in the history of Bitcoin and represents a legal fight that has been waiting for a response for a long time. In this sense, it is not surprising that the confirmation that part of the money stolen back then will return to the market, generate some commotion and expectations.
First of all, because these are funds that have not been marketed for eight years. This means that, despite the current bear market, those bitcoins currently have monetary gains. By the time of the Mt. Gox hack, the price of Bitcoin was hovering between $500 and $1,000 per unit. I mean, today bitcoin is worth 20 times more than it was back then. In this way, if the victims receive the money that was stolen from them, it may still be profitable for them to sell it at this time and take some profit from that money that had not moved.
As if that were not enough, it is not a small amount, the exchange confirmed that in the escrow process for those affected it will distribute a total of 140,000 BTC. Or, which might translate to US dollars, like almost $3 billion. A sum that, if released in one fell swoop, might generate a supply shock in the market as a large amount of BTC enters circulation that may not have as many interested buyers.
It is because of these two elements of the Mt.Gox payment that some traders believe that the release of this money will have negative effects on the price of Bitcoin. If most of the Mt. Gox victims consider selling the money they receive, then this supply action might drive the price down. However, is this an undeniable reality? Will the next September 15 see a drop in the price of BTC without a doubt?
No, it is impossible to say so firmly that this is what will happen. First of all, because the markets are the ones that have the last word, so we will have to wait for that date to really ascertain whether or not this event had an effect on the price. As if that were not enough, it is not entirely clear how Mt. Gox will pay creditors and if it will actually do so in BTC.
According to a company statement published in August and reported by CriptoNoticias, September 15 will be the date on which the trust process will begin to reimburse the money to the victims of the hack. Namely, It is not the exact day on which they deposited the money, but the date on which they promised to start said process. Due to this, there is still no exact date when it can be said that this frozen money will enter the market, and it is possible that the victims will be the only ones who will handle said information when the company notifies them.
As if that were not enough, Mt. Gox stated in the same statement that it will enable various forms of payment for those affected. In other words, receiving bitcoins is not the only way victims can claim their money. A dollar refund is also on the table, so it might reduce the impact that a sell-off would generate in the cryptocurrency market. In addition to this detail, it is naive to think that 20,000 people will have the same attitude regarding the money they will receive.
It is true that the funds to be delivered by Mt. Gox are in profit at the moment, but some may prefer to maintain a savings strategy with an eye to reaching another all-time market high. In this sense, the behavior of those affected cannot be predicted and we will only have to wait to see how they decide to use their money.
The general advice is that, for September 15, you have to keep your eyes on the market and social networks to see how this event will unfold; not letting uncertainty lead us to make hasty decisions.