Galaxy Research Head: Mt. Gox-Induced Bitcoin Selloff Will Be Smaller Than Expected

Alex Thorn, head of research at Galaxy, posted on the X platform that creditors have been stuck in the Mt. Gox bankruptcy for more than a decade, and that BTC and BCH in-kind settlements are expected to begin in July, but that the number of tokens ultimately distributed will be smaller than people think, and that the bitcoin selloff triggered by Mt. Gox will be smaller than expected. Mt. Gox lost about 940,000 bitcoins that year, which was worth $424 million at the time. Mt. Gox lost approximately 940,000 Bitcoins, valued at $424 million at the time, and has recovered 15 percent, or 141,868 Bitcoins to date, which is only a 15 percent recovery but a 140-fold gain for creditors in dollar terms. Creditors will have to absorb about 10 percent of the loss, and it is expected that 75 percent of BTC will choose to absorb a 10 percent loss, which means that about 95,000 Bitcoins will be used to pay claims, of which about 20,000 tokens are owed to the Claims Fund, 10,000 tokens are owed to Bitcoinica BK, and about 6,500 are owed to individual creditors (6,500 is much lower than the figure of 141,868 that had been previously published in the press), resulting in an eventual recovery of 15 percent, or 141,868 Bitcoins. With 141,868 tokens owed to individual creditors (the 6500 figure is much lower than the 141,868 figure previously published in the press), the final compensation distribution will be lower than the market expected. Creditors clearly favor long-term Bitcoin holders, but there is reason to believe that individual creditors will be more generous than the market expects, and once these tokens are distributed, a large portion of them will be sold by creditors into less liquid markets, with all of the tokens to be distributed into creditor accounts at Kraken, Bitstamp, or Bitgo, and once the coins have been transferred to these entities it is expected to take take 24-72 hours to appear in user accounts.