Mt. Gox Starts Distributing $9 Billion Worth of Bitcoin to Creditors This Week

JPMorgan predicts creditors may sell Bitcoin, initially pressuring crypto markets this month. Analysts expect market recovery in August

Bitcoin saw a 4% increase this week, currently trading at around $63,350 and recovering some of its losses from June. However, sentiment towards Bitcoin and the broader crypto markets remains cautious amid concerns over a major liquidation event.

The now-defunct exchange Mt. Gox will begin distributing stolen tokens this week, an event that has investors on edge.

Mt. Gox $9 Billion Repayment Begins

Mt. Gox, a crypto exchange that went bankrupt a decade ago following a large-scale hack, will begin distributing Bitcoin repayments to creditors this week.

The exchange, which was once dominant in the crypto market, lost approximately 950,000 bitcoins in the 2011 hack—a small amount considering Bitcoin’s ATH value at the time ($32 per BTC). Out of the lost bitcoins, about 140,000 were later recovered. At today's prices, these recovered bitcoins are now worth around $9 billion.

Mt. Gox creditors will receive 142,000 bitcoins from July to October, which is valued at about $9 billion at current prices. While there is an October deadline, most repayments are expected to occur in July, according to JPMorgan analysts.

Anticipating Major Sell-Off

JPMorgan analysts predict that some Mt. Gox creditors may sell part of their Bitcoin receivables this month, which could put initial pressure on the crypto markets.

This anticipation is supported by a slight decrease in JPMorgan’s Bitcoin futures position indicator based on CME futures, indicating that mainly retail customers, not institutional investors, have been selling off crypto holdings recently.

However, analysts expect a market recovery starting in August, partly due to upcoming cash repayments from another bankrupt crypto exchange, FTX.

FTX Repayments On The Line

FTX, another bankrupt crypto exchange, will also be repaying its creditors in the coming months, but these will be in cash.

The repayments, which are estimated to range between $14 billion and $16 billion, are expected shortly after the final approval of FTX’s wind-down plan on October 7.

These funds could potentially support the crypto markets as crypto-native creditors may reinvest their repayments into digital assets.

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