The defunct cryptocurrency exchange Mt Gox has finally commenced creditor repayments ten years after filing for bankruptcy.
According to an announcement from the Mt Gox Rehabilitation Trustee, the defunct estate distributed bitcoin (BTC) and Bitcoin Cash (BCH) payments to some creditors on July 5 through designated crypto exchanges linked with the repayment plan.
Mt Gox Begins Repayments
The Mt Gox trustee will continue repaying other creditors when certain conditions are met, including confirming the validity of registered accounts, completing discussions with designated crypto exchanges, and confirming that repayments can be made safely.
The rehabilitation trustee has asked that eligible creditors remain patient while the issues are sorted out. The estate intends to complete repayments before the October 31 deadline.
The commencement of Mt Gox distributions comes as BTC struggles to remain above $54,000 after plunging roughly 5% in the past 24 hours. On the other hand, BCH is down 12% within the same timeframe and hovered around $300 at the time of writing.
Over the past few weeks, there have been concerns that the selling pressure from the Mt Gox distributions would trigger a major BTC correction. Although on-chain experts believe the defunct estate’s BTC moves are no cause for alarm and would cause no immediate selling pressure on the cryptocurrency, Bitcoin charts say otherwise.
Could Bitcoin Plunge Further?
Earlier Friday, bitcoin briefly fell below $54,000 as the Mt Gox estate transferred $2.7 billion worth of bitcoin to a new address in preparation for the repayments. A similar move was seen in May when BTC slumped 4% from $70,000 after Mt Gox moved its bitcoins.
As the repayments continue, bitcoin faces a risk of falling to $50,000, with Mt Gox creditors potentially selling their assets as soon as they are received. This potential decline could also be accelerated by the continued sale of BTC by the German government, which has offloaded roughly 9,641 BTC worth over $539 million in the past 15 days. The crypto wallet linked to the government still holds around 40,000 BTC.
With BTC persistently heading southward, liquidations in the crypto market have been upwards of $660 million and will most likely increase in the coming days. Regardless, analysts insist that leading crypto asset is bound for another rally as the market is still in a bull season.
