- A recent poll has shown that fears of a mass Bitcoin selloff by MtGox creditors are likely unfounded
- Over half of the polled creditors have planned to hold all their BTC upon receipt
- Media fears of an immediate Bitcoin selloff causing a price crash have been contradicted by the poll results
A recent poll regarding MtGox creditors’ plans regarding the bitcoins they are about to receive has shown that fears over a mass selloff are likely unfounded. A poll among the biggest creditor Telegram group, which contains around 10% of the known number of total creditors, shows that over half plan to hold all their BTC once they receive it. This is in contrast to the fears put out by media organizations that the recipients will immediately sell all their coins, stoking a crash in the price of Bitcoin.
Crypto Payouts Coming
MtGox creditors are to begin receiving 140,000 bitcoins and the same number of Bitcoin Cash coins (BCH) this month, more than ten years after MtGox collapsed following years of undetected hacks. The payouts are being sent to select exchanges which will then distribute them to the owners, and mainstream media outlets are portraying the event as a kind of grey swan event, with $9 billion worth of bitcoins being sold en masse.
However, those with experience in the sector and who have spent some time with creditors will know that the situation is more nuanced than that. Simply put, there is not the appetite among many creditors to sell, as a poll conducted in the group shows:
Less than 10% plan to sell all their holdings, with 56% planning to hold everything they get back. While these individuals have naturally profited massively in financial terms through the enforced hold (one bitcoin was worth around $485 at the time of the collapse), they are getting back less than a quarter of their holdings. This means that the amount being received per person is far less than they might have hoped, reducing the desire to sell.
Process May Take Months
It’s also worth remembering that the trustee won’t send everything out in one go, and the exchanges won’t process them all at the same time, either. The whole thing will be a staggered process, potentially taking months, with October being the deadline for the coins to be sent back.
The odds of a quickfire crash are therefore mitigated against by these factors, without even considering that we’re in a bull market and so recipients would be made to sell after the first correction in the cycle.
In other words, don’t believe the hype.
My book on the collapse of MtGox, Ultimate Catastrophe – How MtGox Lost Half a Billion Dollars and Nearly Killed Bitcoin, is out now.
