- Speculation has surfaced that the Mt. Gox Bitcoin will be returned to creditors on October 15 and crash the market
- The ₿150,000 repayment has been in the works since the first related filing in late 2018
- There are very good reasons why the payment will not happen, and why even if it did it wouldn’t crash the market
Speculation has surfaced this week that $1.6 billion worth of Bitcoin owed to Mt. Gox victims is set to be released back to them on October 15. These suggestions have caused panic among some in the crypto community that the 150,000 Mt. Gox Bitcoin is about to be dumped onto the market, causing a huge crash. Not only are these assumptions factually incorrect, they also completely negate other considerations which are worth exploring.
October 15 is Not the Payout Deadline
October 15 is not the deadline by which the Mt. Gox Bitcoin must be paid back to creditors, it is merely the deadline by which the latest plan must be submitted to the Tokyo court that is hearing the case.
Previous rehabilitation plans have been put forward and rejected by creditors, who range from individual holders to businesses owed money, with complications arising over the preference for cryptocurrency or cash repayments by those in line for a payout.
The Deadline Could be Extended Again
Kobayashi put forward a series of recommendations for repayment in late 2018, with an initial deadline of February 2019 for creditors to make a decision. However, that deadline passed with no resolution and so Kobayashi was granted an extension – a process which has repeated every three months or so up to the latest October 15 deadline.
With no suggestions from Kobayashi or creditors that a resolution is any closer than before, there is every chance that October 15 will see him filing for yet another extension, taking the case into 2021.
Creditors Won’t Crash The Market
Even if by some miracle the ₿150,000 did find its way into the wallets of Mt. Gox creditors next week, the chances of them crashing the market are slim. Recipients of that much Bitcoin wouldn’t be stupid enough to sell it all on the spot market the second they got it (at least not all of them), knowing that they would crash the market and thus reduce the dollar value of their own holdings.
With so many over-the-counter methods now available that don’t rock the Bitcoin price boat, there is little chance that the Bitcoin price would tank as a direct result – although it might do out of fear of the event.
Mt. Gox Bitcoin is Staying Put…For Now
It is almost unthinkable therefore that the Mt. Gox Bitcoin will be winging its way to creditors on October 15, and even if it did, a market crash is only likely to occur out of fear of the event rather than the event itself.
These creditors will get their Bitcoin back one day, but it won’t be until 2021 at the earliest.