Mt Gox, previously the world’s leading Bitcoin exchange, is set to return more than $1 billion dollars worth of Bitcoin to crypto owners that have been out of market circulation for over four years. At the beginning of 2014, some 850,000 Bitcoins – worth just under $500 million at the time – were stolen by cyber-criminals from the Mt Gox exchange. Although a significant number of Bitcoin were retrieved, they were returned to the care of a man named Nobuaki Kobayashi, who currently owns $1.9bn worth of Bitcoin.
However, the last time Kobayashi sold a batch of 18,000 Bitcoins from the Mt Gox stash, many cryptocurrency experts attributed an alarming drop in the price of Bitcoin to his sale. Kobayashi insisted the sale on 5th February 2018 was designed to raise funds for disbursements to Mt Gox creditors. However, in doing so, Kobayashi was blamed for causing a price crash below $6,000 the following day as traders panicked at large sums of Bitcoin being sold off, making it a good time for people to buy Bitcoin.
Members of the cryptocurrency scene have voiced their frustrations with Kobayashi and the situation which sees him hold significant influence over the global Bitcoin market. Some crypto investors have questioned why Kobayashi didn’t opt to sell off the $1bn worth of retrieved Bitcoin at auction, just like traditional assets get sold off when a company files for bankruptcy.
However, former corporate users of the Mt Gox exchange could be set for a boon after the announcement of a new online rehabilitation claim filing system which could see as many as 160,000 Bitcoins released back into the market. According to The Telegraph, a former Mt Gox client voiced fears that this decision could “completely crash the market”. It’s a view that’s hardly surprising when you consider Kobayashi’s sale of around a tenth of that amount caused a three-month-low price drop.
Former corporate customers of Mt Gox have until 22nd October 2018 to make a bankruptcy claim via the new-look system, with the missing Bitcoins said to be returned by 14th February 2019 at the latest. With that in mind, crypto investors will probably be looking at a somewhat bearish market for Bitcoin in the months ahead. It’s a great opportunity for seasoned contracts for difference (CFD) traders and even newcomers to CFD trading to go ‘short’ on Bitcoin. Unlike traditional investing in the financial markets, these ‘sell’ CFD orders can help you to profit on the declining value of Bitcoin if the Mt Gox saga impacts the market as much as feared.