Bitcoin is trading just above $61,000, and the market is experiencing a downward trend. This trend is expected to continue and may lead to a significant crash in July.
One of the main reasons for this is the upcoming distribution of customer funds lost in a major 2014 hack at the failed Japanese exchange Mt. Gox. After several deadline extensions, the distribution of these funds is scheduled to begin in July.
All eyes on the profits
The repayments in Bitcoin and Bitcoin Cash are expected to create selling pressure. Mt. Gox customers, who were early Bitcoin adopters, will receive Bitcoin at a much higher price than in 2014. Over $8 billion will flow into the market, which recipients are likely to sell, at least in part.
Bitcoin started 2014 at $750 to $850, down from a peak of around $1,100 in late 2013. In February 2014, Mt. Gox was hacked. The hack and the exchange’s subsequent bankruptcy filing pushed Bitcoin’s price down to around $550 by the end of February.
In 2010, Mt. Gox was launched and quickly grew to become the largest Bitcoin exchange globally. At its peak, it handled over 70% of all Bitcoin transactions worldwide, making it a key player in Bitcoin’s early days.
Unfortunately, the exchange suffered several security breaches over the years, with the most significant one occurring in February 2014. This breach resulted in the loss of approximately 850,000 BTC, which was valued at around $450 million at that time.
The Mt. Gox incident served as a wake-up call for the entire cryptocurrency industry, leading to improvements in security standards, better regulatory frameworks, and the emergence of more robust and secure exchanges.
Recent developments
The repayment plan has been in the works for several years. In 2023, a Tokyo court set a deadline of October 2024 for trustees to implement the plan.
In May, Mt. Gox moved Bitcoin worth around $9 billion from cold wallets. This transfer to an unknown address was the first movement from an on-chain wallet since 2019.
However, the Bulls still have a case. There could be another delay, or only some recipients will decide to cash out. Some might even prefer to take a long position.
