Mt.Gox Sell Pressure is Overstated

Defunct crypto exchange Mt. Gox’s payout plans to creditors and plaintiffs seem to consistently fill the mainstream media’s need to FUD the crypto market and suppress BTC prices.

Participating in this overly aggressive outlook are the usual suspects, or should I say THE usual suspect, JP Morgan. In order to avoid bias in this post, I should put a quick disclaimer here: I hate JP Morgan. I hate everything about them. Fuck JP Morgan.

“Expert analysts” and “teams led by such and such” are so quick to highlight the big numbers: “142K BTC” equal to a “$9B sell off” yada, yada.

Here are major points of consideration that indicate this is FUD blown out of proportion:

1. The current payout agreement states that creditors whom opt to receive the “early lump sum” are entitled to only 21% of their holdings
2. The rest will have to wait until the end of legal proceedings (which, will take 5-9 years and can be superseded by other lawsuits to be settled including a $16B case from CoinLab)
3. The majority of claims requested payout-in-kind (receiving BTC), which means Mt. Gox won’t be selling the BTC. The two largest creditors, chose to receive their payments in crypto rather than fiat
4. Cash settlements in Fiat had already started since early 2023
5. Even in the worst-case scenario of a full liquidation of the 142K BTC, it would only account for approx. less than 10% of daily volume. The market can easily absorb this, and has done many times before.

That last point really puts things into perspective, and pretty much makes this entire FUD narrative moot.

On the other hand, a report by CCN makes a case that every time we start to hear this talk about Mt. Gox, it has coincided pretty much perfectly with the local market bottom:

https://www.ccn.com/news/crypto/mt-gox-repayment-announcement-speculation-bitcoin-bottom/

https://x.com/esatoshiclub/status/1805168630394503534?s=46&t=d5nuVMonz8BX6y7xSWK5ag

https://x.com/defi_warhol/status/1805167226141520254?s=46&t=d5nuVMonz8BX6y7xSWK5ag

https://x.com/igloobamboo/status/1805172449819992500?s=46&t=d5nuVMonz8BX6y7xSWK5ag

JP Morgan’s report highlights can be found in the link below in an article by CoinDesk that quoted:

“the announcement unsettled crypto markets due to concerns that some creditors will dump their bitcoin in July as soon as they receive them. Creditors are set to receive 142,000 bitcoin worth about $9 billion at current prices. If most of the liquidations by Mt. Gox creditors do occur in July, crypto markets are expected to sell off next month then rebound in August, the report said.”

https://www.coindesk.com/markets/2024/06/27/crypto-markets-to-see-selling-pressure-in-july-from-mt-gox-creditors-jpmorgan/

After previous efforts to repay Mt. Gox creditors were derailed, the current rehabilitation plan that was approved in November 2021 stipulates:

Creditors were given the choice to receive an “early lump sum” payment equivalent to around 21% of their crypto held on the platform. Alternatively, they could opt to wait until after the conclusion of various lawsuits for a chance to receive a higher amount. Although waiting could result in a greater payout, there is no guarantee it will do so.

Initially, early lump sum repayments were scheduled to occur by October 2023. However, that deadline was pushed back at the last minute, giving the exchange an extra year to distribute assets. The final deadline is now October 31, 2024.

Users who received cash repayments reported receiving money in their bank accounts one to two months after their claims accounts were updated. If a similar timeline plays out for crypto payouts, creditors could receive their funds within a month.

https://x.com/axeladlerjr/status/1795388362389692842?s=46&t=d5nuVMonz8BX6y7xSWK5ag

https://www.ccn.com/mt-gox-payout-schedule-date-details/ Show Less