Want your Goxxed coins back? It might be your lucky day

Some monumental news has just been announced. The remaining bitcoins recovered from the defunct MtGox can be claimed by their owners, with far-reaching consequences for confidence in crypto and the state of the markets. As yet, though, the impact has been… zero.

Over the weekend, a document was posted on the MtGox website stating that the Tokyo District Court had approved a petition that would move the company from criminal bankruptcy to civil rehabilitation.

The major difference between the two for those who lost BTC when MtGox imploded is the following: in bankruptcy proceedings, all assets are sold for cash and the creditors reimbursed. Under civil rehabilitation, those assets can be distributed in their existing form.

In other words, the court has just opened the way for Gox’s users to recover a proportion of their lost bitcoins. Previously, everything would have been sold, creditors paid off, and — under Japanese law — Mark Karpeles would have got the rest. The enormous revaluation of bitcoin that has occurred since 2014 would have meant that Karpeles received hundreds of millions of dollars in BTC. This way, Gox users will only get back a fraction of the bitcoins they held on the platform, but the fiat value will be vastly higher than they would have otherwise seen. There are currently just under 138,000 BTC in the trustee’s Gox wallet, plus all the BCH and other airdropped currencies that have accumulated in the last year or so. Users will recover just a fifth of the bitcoins they lost, but they will be worth around 10 times as much.

Analysis

This is potentially extremely bullish news. The sale of a large quantity of Goxcoins by the bankruptcy trustee was blamed for sparking the heavy falls we saw from the peak of $20,000 in December 2017. Whilst that seems like clutching at straws (the market was clearly in a severe bubble and was due a steep correction), the same traders who made moves based on that explanation have just had a major source of worry taken off the table. It doesn’t mean those bitcoins won’t be sold by their new owners, but

They might not be sold — and they definitely would have been under bankruptcy proceedings It won’t happen until they are distributed next year, at least six months down the line.

It’s an indication of the bear market we are in that traders have not reacted to this at all. Bear markets ignore good news, just like bull markets ignore bad news. This is all part of the picture of normal market cycles. This development will have a fundamental impact on the market in the future, but right now it’s being discounted due to poor sentiment.

For more information, see https://www.mtgox.com/img/pdf/20180622_announcement_en.pdf

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