The market may overreact to the upcoming Mt. Gox BTC distribution — presenting a buying opportunity. Long-term HODLers should use lower prices to accumulate BTC.
Matthew Kratter
Jun 24, 2024June 24, 20246 min read6 minutes read
Bitcoin University
Bitcoin University is an educational channel devoted to Bitcoin, financial freedom, and self-sovereignty. Matthew also covers relevant macro and financial news.
Mt. Gox Dump Coming?
Today, we are covering how finally, after 10 years, Mt. Gox, the earliest large Bitcoin exchange, which launched in 2010 and closed in 2014, handling over 70% of all Bitcoin buys and sells worldwide, is set to distribute the coins it had at the time of its bankruptcy.
This was the original lesson in “Not your keys, not your coins” and why it’s important not to leave your Bitcoin on an exchange where they can be hacked or stolen.
It’s also a good time to revisit the scammer, the Bitcoin Cash scammer Roger Ver, and what he said to reassure people that their Bitcoin was still safe.
“I’m Roger Ver, a longtime Bitcoin advocate and investor. Today, I’m at the Mt. Gox world headquarters in Tokyo, Japan. I had a nice chat with Mt. Gox CEO Mark Karpeles about their current situation. He showed me multiple bank statements as well as letters from banks and lawyers. I’m sure that all the current withdrawal problems at Mt. Gox are being caused by the traditional banking system.”
His claim is, of course, absurd because you don’t need any help from the traditional banking system to send someone their Bitcoin. It turns out, Mt. Gox did not have enough Bitcoin to ensure order flow. This is one in a series of many lies by Roger Ver.
That aside, it does look like people are going to begin to get some of their Bitcoin back, up to $9 billion worth of Bitcoin and Bitcoin Cash, because of the fork that happened while these coins were still being held by the Mt. Gox trustee.
This letter on the Mt. Gox website looks legitimate and indicates that these repayments are going to start. It looks like these coins will be starting to be returned to people at the beginning of July.
The market is panicking about this. But there were signs that this distribution was coming in April of this year. Mt. Gox creditors reported that they had an update in their payment system on the website.
Someone put in a snapshot showing the date April 18, 2024, and the fact that they were beginning to make plans to redistribute the Bitcoin.
The Mt. Gox funds represent 141,142 out of a total of 21 million Bitcoin. That’s just 0.675%, so just a bit more than half a percentage of the coins may be sold.
The actual amount will probably be much lower. Why?
Creditors, in other words, old customers of Mt. Gox have had more than 10 years to sell their claims. When selling your claim, you give up your claim for Bitcoin that Mt. Gox owes you in exchange for a fiat payment today.
These claims were made at various levels, 40%, 50% or 60% on the dollar — who knows. You might be asking, “Won’t the hedge funds that bought up those claims dump the Bitcoin once they receive it this summer from Mt. Gox?”
Perhaps they will, but they’ve also had years to hedge their positions.
They might go short on Bitcoin futures or Bitcoin ETFs to lock in their profit potential. If they sell their Bitcoin after receiving it from the Mt. Gox trustee, they will also buy back their short futures positions or short ETF positions. The net effect for these hedged institutional traders will be zero, and the net effect on Bitcoin’s price will be zero.
So why is the market panicking today?
Probably because people are shortsighted and use short-term news as a catalyst to trade.
Even Elon Musk has traded in and out of Bitcoin like a fool over the past couple of years. He talked about Bitcoin’s long-term potential when he bought in 2021, then dumped 75% of it near the lows in 2022.
We have these endless rumors about people buying and selling Bitcoin. I’d encourage you to disregard all of these. For example, this was true of a rumor from August 18, 2023, that looks like it was wrong because reports are that SpaceX still owns this Bitcoin.
Supposedly, they were dumping it on August 18, 2023, when Bitcoin was at $27,000.
If you follow short-term news and trade based on it, you’ll hamper your Bitcoin returns.
This Mt. Gox FUD has been happening for years. Back on August 23, 2022, some short-term holders dumped their Bitcoin around $19,000 or $20,000 on rumors that the Mt. Gox payments were about to start.
This is long-term FUD, and the best thing you can do is ignore it. One of the funny things about it is that it’s causing a sell-off across all cryptocurrencies.
It’s actually Bitcoin that may be dumped, but Ethereum is selling off even harder on the news, down 5%. This shows how all other cryptocurrencies are derivatives of Bitcoin’s price and don’t have a mind of their own.
Ethereum dumping because Mt. Gox is distributing Bitcoin doesn’t make any sense. Ignore the rumors, flows, and online movements of Bitcoin from an exchange.
These things don’t matter if you’re a long-term hodler. You should be happy if Mt. Gox sellers dump and depress the price. This provides the opportunity for more people to get on the Bitcoin lifeboat before the next round of money printing and the next leg down in fiat.
If your Bitcoin is sitting safe in cold storage, you have nothing to worry about. However, do not leave your Bitcoin on an exchange that might turn out to be the next Mt. Gox.
Every exchange has the potential to either be hacked or criminally drained of its Bitcoin. Not your keys, not your coins. People first learned this with Mt. Gox and should understand the lesson today.
Do not leave your Bitcoin on an exchange. Instead, withdraw it and hold your private keys on a hardware wallet like a Coldcard. If you want to be a truly self-sovereign holder of Bitcoin, learn to hold your own Bitcoin private keys.
Learn to use these tools, and I guarantee you the feeling is incredible once you’re less reliant on banks and large exchanges to give you permission to move your Bitcoin.
Bitcoin University is an educational channel devoted to Bitcoin, financial freedom, and self-sovereignty. Matthew also covers relevant macro and financial news.
Matthew Kratter is the founder of Bitcoin University YouTube channel, which currently has over 235,000 subscribers.
Before going down the Bitcoin rabbit hole, he founded and ran Trader University, focusing on trading and investment strategies for stocks, options, and futures. Given his hedge fund background and decades of trading experience, Matthew provides a unique perspective.
In late 2019, after finally recognizing Bitcoin’s importance, he began liquidating his stocks and other investments and moving his savings into Bitcoin.
Now, Matthew is all in on Bitcoin, devoting the majority of my time to producing Bitcoin educational content on YouTube and on this site.
In his free time, he enjoys skiing and hiking in the Rockies with his wife, kids, and dogs.
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