Mt. Gox To Repay Creditors Next Month Amid Heavy Bitcoin Miners Sell-Off – Crypto News

Billions of dollars worth of Bitcoin earmarked for Mt. Gox creditors may soon enter the markets.

On June 24, Mt. Gox, the pioneering and now-defunct Bitcoin exchange, announced it will begin distributing Bitcoin (BTC) and Bitcoin Cash (BCH) repayments to creditors beginning in July 2024.

Nobuaki Kobayashi, Mt. Gox’s Rehabilitation Trustee, communicated the news. Kobayashi said that payouts will be made to various cryptocurrency exchanges with which he “completed the exchange and confirmation of the required information for implementing the repayments.”

“Now that these preparations are in place, the Rehabilitation Trustee will commence the repayments in Bitcoin and Bitcoin Cash from the beginning of July 2024,” Kobayashi said

Kobayashi explained that the exchange has taken time due to the need to establish “safe”, “reliable,” and compliant repayment arrangements. Repayments will be made in cooperation with specific cryptocurrency exchanges.

Mt. Gox was founded in 2010 and quickly emerged as the largest Bitcoin exchange in the world. However, in 2014, the exchange suffered an exploit resulting in the loss of 850,000 Bitcoins held by 240,000 users.

In September 2023, the trustee announced that creditors would receive partial repayment of 142,000 BTC, 143,000 BCH, and fiat currency amounting to $510 million by October 2024. Creditors have now waited nearly a decade for repayment.

Heavy selling pressure

While creditors will doubtless be happy to receive repayment, some traders fear the distribution could manifest in heavy selling from investors who have long waited on the sidelines to receive their stolen Bitcoin.

In May, Mt. Gox moved approximately $9 billion in Bitcoin for the first time in five years, triggering fears that a flood of BTC may be about to enter the markets.

The repayments appear set to coincide with heavy selling from miners who are reeling after the fourth Bitcoin halving in April.

The halving reduces the rate of new BTC issuance by 50% every four years, with 3.125 BTC now entering supply per block, down from 6.25 BTC. Combined with a drop in Bitcoin transaction fees, average miner revenue has dropped by 56% per terahash of energy invested in validating the network since the halving, according to The Block.

According to IntoTheBlock data, miners have sold more than 30,000 BTC ($2 billion) since the start of June, the heaviest sales in more than one year. IntoTheBlock attributed the trend to miners adjusting to “tighter margins” following the halving.

Data from CryptoQuant also shows that miner reserves have dropped to their lowest level since July 2021 — the largest annual drop since 2011 — in a bid to cover operational expenses and stay afloat.

In May, CryptoQuant analyst JA Maartun told The Defiant that many inefficient miners are simply turning off their hardware after being rendered unprofitable by the halving.

Decreasing Bitcoin hash rate also indicates miners are exiting the network, with data from Blockchain.com indicating Bitcoin’s hash rate has dropped 7% since peaking at 650 exahashes per second (EH/s) on the day of halving.

Bitmain launches new Antminer

However, Bitmain, a major manufacturer of Bitcoin mining ASICs, will soon offer a lifeline to suffering miners.

On June 17, Bitmain unveiled its new Antminer S21 series. Irene Gao, VP of Mining at Bitmain said the new Antminer S21 boasts a hash rate of 234 terahashes per second (TH/s) and an energy efficiency ratio of 15.0 Joules per terahash (J/TH) — offering a roughly 50% improvement in energy efficiency over the previous model.

The new ASICs are expected to ship sometime around Q4 2024 or Q1 2025.

Embattled miners in the United States may have found an unlikely ally in the former U.S. President, Donald Trump. Two weeks ago, the Republican candidate met with representatives from the Bitcoin mining industry, pledging to support the industry should he win the upcoming presidential election in November.

However, some onlookers are skeptical, suggesting Trump may be offering hollow promises in a bid to court votes from the crypto industry.

In the past 24 hours, the price of BTC dropped 2.55%, according to The Defiant’s crypto price feeds.