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Bitcoin is trading below $60,000 for the first time since early May, when exchange MtGox announced that it will begin distributing approximately $9 billion in cryptocurrencies and $50 million in bitcoin cash to its long-suffering creditors.

The now-defunct Tokyo-based platform, once the world’s largest bitcoin spot exchange, closed in 2014 after a series of hacks. Of the 950,000 bitcoins lost, approximately 140,000 were recovered after MtGox declared bankruptcy, leaving thousands of creditors around the world stranded. Nine years later, authorities identified the hackers as two Russian citizens loaded by the US Department of Justice for conspiring to launder approximately 647,000 bitcoins from the exchange.

Over the years, MtGox has faced several delays in repaying creditors, but today administrator Nobuaki Kobayashi announced the exchange will begin distributing bitcoin and bitcoin cash (which customers automatically received in 2017 when the token was created) to the cryptocurrency exchanges it has agreed to distribute payments with, which include Kraken, Bitstamp and BitGo, next month. The exchange emerged from an online card trading service, and MtGox stands for Magic: The Gathering Online Exchange.

The crypto market’s reaction was swift, with more than $200 million worth of long positions forcibly liquidated in the last 12 hours, according to Georgi Koreli, co-founder and CEO of privacy protocol Hinkal. “We expect the payments to be a stress for the market, however, they could be a tremendous opportunity for those waiting to ‘buy the dip,’” Koreli said in a comment to Forbes.

Alex Thorn, head of research at Galaxy Digital, a cryptocurrency-focused investment firm founded by billionaire Mike Novogratz, believes the market is overestimating the potential impact. Of the 140,000 bitcoins held by the bankruptcy estate, only about 65,000 will be handed over to 20,000 individual creditors, many of whom are tech-savvy early adopters and well-known bitcoiners, Thorn noted in a research note to clients last seen by Forbes. month. These include co-founders of bitcoin technology firm Blockstream Adam Back and Greg Maxwell and longtime bitcoin booster Roger Ver.

A significant reason for lenders not to sell all of their tokens at once is the risk of a massive capital gains tax. Many creditors purchased their bitcoin for as little as $451 (the price when MtGox filed for bankruptcy), and with bitcoin now trading just below $60,000, the tax implications are considerable.

The remaining tokens will be sent to separate large claims and bankruptcy funds. Contrary to market expectations, Thorn suggested that these funds will not flood the market. “In speaking with several LPs in these funds, we do not believe there will be significant sales from this group. Likewise, Bitcoinica (a bitcoin exchange that was also hacked and whose administrator placed its recovered coins in Mt. Gox for safekeeping…) will not be able to sell for payment because the funds will enter their own bankruptcy process in New Zealand,” he said. he wrote.

Matt Hougan, chief investment officer at crypto asset manager Bitwise, agrees: “The best studies on MtGox claims suggest that most early investors have already sold their claims on the secondary claims market. For example, NYDIG has some quality research that suggests the actual amount likely to enter the market is closer to $3 billion than $10 billion. Still, $3 billion is a lot of bitcoin. I suspect what you are seeing now is market pre-positioning for these distributions. That makes this a ‘sell the rumor, buy the news’ event.”

Bitcoin cash, however, is expected to perform worse. It was created in 2017 as a result of a blockchain split when some developers were unhappy with Bitcoin’s scalability, according to CoinGecko. “The creditor group is significantly comprised of ‘OG’ bitcoiners who have never purchased bitcoin cash and will likely have no affinity for the 2017 bitcoin fork,” Thorn wrote, noting that bitcoin has 60 times more liquidity than bitcoin cash in the Kraken and Bitstamp, where individual lenders will receive coins.

All known MtGox admin wallet addresses can be tracked via Arkham Intelligence.

Bitcoin recently traded at $59,026, according to CoinGecko, down 8.3% in the last 24 hours.

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