Bitstamp, one of the five cryptocurrency exchanges involved in the distribution of billions of dollars worth of Bitcoin owed to Mt.Gox creditors, announced on Monday its plans to distribute funds to investors as soon as the funds are received.
In a statement shared with Decrypt, the exchange acquired by Robinhood stated, “As per the agreement with the Mt.Gox trustee, Bitstamp has 60 days to distribute the tokens, though we are certainly working to ensure that these investors are made whole as soon as possible.”
This comment reveals a fundamentally opaque and concerning process where the trustee of the now-defunct Mt.Gox, once the world’s largest cryptocurrency exchange, plans to unload 142,000 recovered Bitcoin to creditors who were left empty-handed when the platform was hacked and shut down in 2014.
Many cryptocurrency holders are worried that a large amount of funds being dumped on the market simultaneously could drive down the price of Bitcoin. Last week, Bitcoin dropped nearly 10% as Mt.Gox accelerated the process of transferring its BTC holdings, worth $2.7 billion, from cold storage to an unidentified wallet.
Due to concerns about the impact of Mt.Gox BTC refunds on the market, as well as the recent German government’s liquidation of seized Bitcoin, the top cryptocurrencies globally experienced a 19% decline last month.
The total value of all the distributed Bitcoin by the Mt.Gox trustee is estimated to be around $8 billion, while Arkham claims that the German government still holds tokens worth approximately $1.5 billion.
Experts predict that the sell-off of these substantial funds in the market is likely to push down the price of Bitcoin.
Pav Hundal, Chief Market Analyst at cryptocurrency exchange Swyftx, previously told Decrypt, “Bitcoin’s price is going to need a massive July to withstand the influx of massive supply from Mt.Gox and the German government. This could be the reason we see it drop as low as $50,000.”
Bitstamp’s update today indicates that sending such a large amount of cryptocurrency to users comes with complex and competing priorities: while cryptocurrency creditors may lean towards maintaining Bitcoin’s price stability, they also want to regain control of the funds owed to them as soon as possible.
Edited by Ryan Ozawa.