It is likely that the 150,000 Bitcoins of the now defunct Mt. Gox exchange will not reach the market in the near future.
Speculation is growing that 150,000 Bitcoins (BTC) of Mt. Gox’s trustee could move on 15 October. However, several factors suggest that such a development is extremely unlikely given the previous events.
Between 2011 and 2013, Mt. Gox lost 850,000 BTC in the largest computer attack in Bitcoin history. The trustee owns BTC 150,000 to reimburse users who lost their funds due to the breach.
Despite this, there are many hurdles to overcome before refunds can be distributed. Return procedures continue to be postponed from 2019, and refunds will probably not happen soon.
The Mt.Gox trustee statement
The statement of the Mt.Gox trustee. Source: Mtgox.com
How to explain the sudden speculation on the 150,000 BTC of Mt. Gox
On 30 June, the trustee of Mt. Gox issued a statement on the official website mtgox.com. The trustee, in charge of redistributing funds to former users, said that the Tokyo District Court has granted an extension of the deadline to 15 October. The document reads:
„In light of the above considerations, the Rehabilitation Trustee filed a request for an extension of the deadline for the rehabilitation plan with the Tokyo District Court, and, on June 30, 2020, the Tokyo District Court issued an order to extend the deadline for the rehabilitation plan to October 15, 2020“.
Based on this document, some investors have suggested that the BTC 150,000 could move, potentially shaking up the market.
However, there are two main reasons why the trustee will not move the Bitcoin Formula in the short term.
First, the extension concerns the presentation of the rehabilitation plan, not the repayment of BTC. In a nutshell, the October 15 deadline is about the plan proposal, not the investor redemption process.
Secondly, over the past year, the trustee has continually requested extensions. An identical statement was issued in March 2020 and April 2019, and extensions of the deadline were granted in both cases.
October 15 is not the actual deadline for reimbursements to users and the Trustee has postponed the process several times in the past. Based on these two factors, it can be assumed that the BTC 150,000 from the Mt. Gox trustee will not reach the markets in the short term.
Bitcoin resists despite negative events
In the last week, Bitcoin has faced several negative events that have caused considerable sales pressure.
On October 1, the US CFTC filed charges against BitMEX, immediately causing more than 5% pullback in Bitcoin, and 24 hours later US President Donald Trump tested positive at COVID-19, causing a correction in most asset classes, including BTC.
Despite consecutive negative events, Bitcoin showed surprising resistance in October. BTC still remains above $10,500, a level that has been a critical support zone since August.
In the medium to long term, on-chain analyst Willy Woo believes Bitcoin’s market outlook remains positive:
„The capitulation took place last year at $3,000, since then we are in a bull market, it has only been hidden by BitMEX traders with the strong fluctuations they create. The rise from $4,000 to $14,000 was the mother of all squeezes, and it took some time to return to organic valuation“.