A cryptocurrency exchange that went bankrupt a decade ago due to a hack is preparing to refund $9 billion worth of Bitcoin this month, sparking concerns among investors about its potential impact on Bitcoin’s price.
Tokyo-based Mt. Gox, formerly the world’s largest Bitcoin exchange, is supposed to return over 140,000 Bitcoin to victims of the 2014 hack. According to an analyst from JPMorgan, the cryptocurrency market may face downward pressure in July due to potential selling from Mt. Gox creditors, CoinDesk reported. Creditors who will receive Bitcoin may sell them as soon as they get them, as per the report.
Matt Hougan, CIO of Bitwise Asset Management, believes that the release of locked Bitcoin from the Mt. Gox trust will only be a short-term negative for Bitcoin. “Based on the positive long-term trends, I think bitcoin should already be trading at all-time highs. It’s not because the short-term negatives are weighing on price,” Hougan said in an email to Quartz.
“From my seat, that feels like an opportunity.”
He anticipates that Bitcoin, which is currently trading between $50,000 and $70,000, will move in the positive direction as the US election and fall buying season approaches.
As of Monday morning, Bitcoin is hovering around $62,000, up 2% from yesterday. A few days ago, the leading cryptocurrency experienced one of the worst weeks in 2024.
The Mt. Gox hack was one of the first major cryptocurrency hacks. In 2011, hackers made off with 25,000 Bitcoins valued at around $400,000. The exchange handled nearly 70% of all Bitcoin transactions at that time.
In 2014, Mt. Gox experienced another attack, which resulted in the loss of nearly 650,000 of its customers’ Bitcoins and about 100,000 of its own. This amounted to approximately 7% of all bitcoins in circulation at the time, valued at around $473 million. At that time, Bitcoin was roughly around $600.
The exchange declared bankruptcy in 2014, owing creditors 45 billion yen ($414 million). Creditors have been waiting for the repayment of their holdings ever since. Earlier this year, in May, Mt. Gox made its first transaction in over five years. This was part of the plan to distribute the assets back to creditors before October 31, 2024.
