150,000 Mt. Gox Bitcoin won’t trigger a correction anytime soon
150,000 BTC from the now-defunct Bitcoin exchange Mt. Gox won’t likely hit the markets anytime soon.
There is growing speculation that 150,000 Bitcoin (BTC) from the Mt. Gox trustee could move on Oct. 15. But many factors suggest that is highly unlikely given past records.
Between 2011 and 2013, Mt. Gox lost 850,000 BTC in the biggest hacking attack in Bitcoin history. The trustee reportedly has 150,000 BTC to repay users who lost their funds from the breach.
Yet, there are many hurdles to undergo before the refunds can be issued. The refund process has been continuously delayed since 2019, and the refunds won’t likely happen anytime soon.
The Mt.Gox trustee statement. Source: Mtgox.com
Why is there sudden speculation about the 150,000 Mt. Gox BTC moving?
On Jun. 30, the Mt. Gox trustee released a statement on the official Mtgox.com website. The trustee, in charge of redistributing the funds to former users, said the Tokyo District Court granted a deadline extension to Oct. 15. The document read:
“In light of the foregoing, the Rehabilitation Trustee filed a motion to seek an extension of the submission deadline of the rehabilitation plan at the Tokyo District Court, and, on June 30, 2020, the Tokyo District Court issued an order to extend the submission deadline for the rehabilitation plan to October 15, 2020.”
Based on this document, some investors have suggested it could cause 150,000 BTC to move, potentially rattling the market.
But there are two key reasons the trustee would not move the Bitcoin in the near term.
First, the extension pertains to submitting the rehabilitation plan, not refunding the BTC. Simply put, the Oct. 15 deadline is for the trustee to put forward a plan, not to refund investors.
Second, the trustee has continuously requested extensions throughout the past year. An identical statement was put out in March 2020 and in April 2019, and deadline extensions were granted.
Oct. 15 is not the actual deadline for user refunds and the trustee has delayed the process several times in the past. Based on these two factors, it is safe to presume that the 150,000 BTC from the Mt. Gox trustee won’t hit markets in the short term.
Bitcoin remains resilient despite negative events
In the past week, Bitcoin has faced numerous negative events that mounted significant selling pressure on BTC.
On Oct. 1, the United States CFTC’s charge against BitMEX immediately caused Bitcoin to pull back by over 5% while 24 hours later, U.S. President Donald Trump contracted COVID-19, causing most asset classes, including BTC, to correct.
Despite back-to-back pessimistic events, Bitcoin has shown surprising resilience throughout October. BTC still remains above $10,500, a price level that acted as a critical support area since August.
In the medium to long term, on-chain analyst Willy Woo said the Bitcoin market outlook remains positive. He said:
Capitulation happened last year at $3k, we’ve been in a bull market ever since, it’s just been camouflaged by BitMEX traders with the wild swings they create. $4k->$14k was the mother of all squeezes, retracing back to organic valuation took a while. https://t.co/6qG1NpzlT2
— Willy Woo (@woonomic) October 4, 2020