Bitcoin Prices Drop Due to Mt. Gox Trustee Announcement

Bitcoin (BTC) is leading the cryptocurrency market lower on Monday following an announcement by the trustee for the defunct Mt. Gox crypto exchange. The trustee revealed plans to begin returning over 140,000 BTC in July to clients whose assets were stolen in a hack back in 2014.

Impact on Bitcoin Market and Price

Currently, bitcoin is trading at $60,700, marking a decrease of more than 5% over the past 24 hours and reaching its lowest level since the beginning of May. Ether (ETH) has also experienced a similar decline, along with the broader CoinDesk 20 Index.

Traders are expressing concerns about the potential effects of releasing over 140,000 bitcoins into the market in less than a month. This amount is almost equivalent to the immediate liquidation of Fidelity’s spot bitcoin ETF, which currently holds 167,375 bitcoin.

Research conducted by Alex Thorn, head of research at Galaxy, suggests that around 75% of creditors will opt for the “early” payout in July, resulting in a distribution of approximately 95,000 coins. Thorn speculates that out of this, 65,000 coins will go to individual creditors. He believes these creditors may hold onto their bitcoin holdings rather than selling immediately, citing their history of resisting offers from claims funds and the significant capital gains taxes involved due to bitcoin’s exponential price increase since the bankruptcy.

Thorn also notes that most partners in claims funds are high net worth individuals seeking to accumulate more bitcoin at a discounted rate, rather than engaging in short-term trading strategies.