This Is How MtGox Will Affect The Crypto Market
In a long-anticipated development, MtGox has finally initiated payments to creditors nearly a decade after the collapse of the once-dominant Bitcoin exchange during the early days of the cryptocurrency boom.
The first fiat payments mark a significant milestone eagerly anticipated by those affected by the exchange’s downfall.
However, optimism is tempered by the realization that the process is unfolding at a frustratingly slow pace, and some mistakes that occurred in these payments threaten to further impede the reimbursement process.
MtGox will start paying back Bitcoin and Bitcoin Cash to those affected, with the whole process expected to happen in 2024, probably by the end of the year.
While this brings hope, there’s yet another event that will occur and once again will surprise unaware investors, which we will also analyze here.
Furthermore, the MtGox situation highlights how cryptocurrency is constantly changing and how rules are still catching up.
MtGox’s history has left an impact, making the early adopters realize there is no safety without self-custody. Bitcoin is trustless, therefore even top custodians pose a grave danger to our financial well-being.
The Ghost Of MtGox Will Return One Final Time
The Story So Far:
In the early days of 2014, Mark Karpelès had to file for bankruptcy as he was unable to recover a significant amount of Bitcoins that were stolen and mismanaged through his exchange, MtGox.
This was not the first time that the exchange had been hacked, with over 800,000 Bitcoins being stolen from it since 2011.
However, after the collapse of the exchange, Mark Karpeles miraculously discovered a cold storage wallet containing 200,000 Bitcoins, which were not affected by the hack.
Since then, the distribution of these recovered Bitcoins, which now contain both BTC and BCH in equal amounts, is what creditors of MtGox are waiting for.
In 2018, the appointed trustee (Mr. Kobayashi) tried to liquidate a portion of these Bitcoins (24,215 BTC and BCH), but unfortunately, this happened when Bitcoin was already entering a new bear cycle that lasted for two more years.
The Current Events
Today, 140.000 BTC and BCH remain undistributed among creditors of MtGox, while the Trustee initiated in November 2023 some payments for smaller creditors that had asked to be paid in fiat currencies instead of Bitcoin.
Creditors have already selected the chosen method of payment, which is fiat currency, BTC, BCH, or a mixture of those, and the first fiat payments have already been initiated.
Yet, there seem to be delays in the delivery of BTC with no planned date announced.
Chart on wizsec
Be aware that the price of Bitcoin BTC may decline as many creditors are expected to sell their BTC holdings for a significant profit.
Certainly, they will get just 20–25% of their BTC but BTC has also increased by 100x all these years.
Therefore, this forced-hold event allowed these investors to enjoy massive profits, which will be realized to a large degree.
The price will suffer as thousands of BTC will be liquidated. In 2018 when the Trustee started selling the amounts were just 2000BTC each time and the price had collapsed by 80% when he ended the sales.
We analyzed previously that BTC can reach $100k.
The market at these euphoric conditions (end of 2024) will not be able to absorb the sale of 100k BTC, and the price will collapse.
The traders will have already shorted the market and support these shorts with spot selling pressure. The price of BTC in 2025 will revisit 2017 levels (below $20k), which will be a major indicator regarding the future potential of BTC as an asset with no actual utility.
I can’t see any other scenario playing out. It all fits the Bitcoin cycles anyway, and we’ve previously analyzed why the next top for BTC will be $100k, and what exactly the future holds for an asset that has removed all utility and disruptive potential selling out to the legacy finance and the banks.
What About Bitcoin Cash?
Since this market consists of dreamers, fake narratives, deception, and economic illiteracy, Bitcoin Cash will surprise everyone (besides those reading this story).
Bitcoin Cash consists of early Bitcoiners (Bitcoin OGs). The real ones, though.
Those that mined Bitcoin with their CPU, developed for Bitcoin, bought Bitcoin early, and promoted merchant adoption of Peer-to-Peer Electronic Cash.
Bitcoin was never alone. It was always Bitcoin: A Peer-to-Peer Electronic Cash System. And today, this is not BTC, the version that proceeded since 2017 as digital gold, but Bitcoin Cash.
The version of Bitcoin closest to the whitepaper is Bitcoin Cash, while BTC has entirely dismissed the money/payments aspect as part of the agenda of Blockstream to push second-layer solutions like Liquid and profit from them.
Bitcoin Cash Has Bitcoin OGs Backing It
The crypto and mainstream media have suppressed this part as well.
The current price of BCH is too low for a working version of Bitcoin with thousands of loyal followers/users, developers, and top investors.
These Bitcoin OGs hold MASSIVE amounts of BTC and BCH in MtGox, and when distributed they will support BCH.
I posted this on a social media platform a few days ago and firmly stand by it:
Bitcoin Cash will reach 0.1BTC in 2024 and higher in 2025.
One of the reasons for the return of BCH will be the distribution of MtGox Bitcoins to creditors, with many of them being whales that support BCH.
Bitcoin BTC has appreciated by approximately 10,000% since 2014, therefore we should consider the fact that most of the MtGox users that will receive their Bitcoin will take profit.
At this point, it is also relevant to mention how we perfectly predicted how the Grayscale ETF would immediately initiate an exodus of investors:
Correct Prediction On Grayscale’s ETF Immediate Impact
Selling pressure by Grayscale outflows from GBTC created havoc in the market and perhaps bearish conditions for the remaining months until the Bitcoin BTC fourth halving and a few more months after that.
Also read:
Grayscale GBTC investors are massively exiting their overpriced (2% annual interest) investment in the trust and either liquidating to USD or moving to other funds.
We analyzed this scenario and concluded that traders would also pick this signal, and the odds of a “sell the news” event for the approval of ETFs were high.
We’ve also explained the overall idea of ETFs and how hype does not last but also analyzed the speculative cycles of BTC, with the new one that will begin in a few months and BTC reaching $100k, a top that will result in disappointment.
In Conclusion
The timing of the MtGox Bitcoin distribution ultimately rests in the hands of the trustee, Mr. Kobayashi, however, I consider it impossible to distribute Bitcoin at present.
The distribution is likely to happen during the next BTC bubble’s peak, which will also mark its highest point.
This will be an excellent opportunity for BTC investors to obtain a perfect price and liquidity to sell their investment, considering the absence of potential for future growth.
BTC in terms of price performance is expected to fall short once again, for the second time, after the failure to achieve $100k in 2021.
Nonetheless, amidst this backdrop, there are appealing investment prospects elsewhere in the cryptocurrency field, particularly in the notable progress and innovation observed in Ethereum and Bitcoin Cash.
Cover (background) on Pixabay
Also Read:
👉 My Links:
Donations
BCH: tipb.ch/Pantera
CashTokens: bitcoincash:zr4nz4jv6jtf7q5tul8dy9j58u24pwawxsm0hh8hwz
Don’t forget to Subscribe and Like if you enjoyed this story!
