Sunday, July 21, 2024

Trustee prepares to release 150K BTC, Bitcoin must deal with the Mt. Gox “black swan”.

Bitcoin (BTC) is reportedly facing a ‘black swan risk’ in the form of Mt. Gox as its creditors are now choosing how much money to receive in cash, BTC, or Bitcoin Cash (BCH). According to Nassim Nicholas Taleb, an economist, a black swan risk is an unexpected event having three characteristics: rarity, extreme impact, and retrospective predictability.

Mt. Gox as a rare event and its extreme impact

Magic: The Gathering was the basis for Mt. Gox, a Tokyo-based BTC exchange. In 2013, Mt. Gox was at its peak as the world’s largest BTC exchange as it handled nearly 70-80% of BTC’s trading volume. Tragedy struck in February 2014 as Mt. Gox lost about 850,000 BTC due to what it called a ‘bug’, affecting nearly 24,000 creditors and destabilizing the cryptocurrency market. It was forced to liquidate in April 2014. An incident of this scale is not a common occurrence. In 2018, the Japanese court appointed Nobuaki Kobayashi, a bankruptcy lawyer, to oversee the rehabilitation plan of Mt. Gox and phase-wise compensation of the 24,000 claimants.

In retrospect

The price of BTC at the time of this event is a fraction of BTC’s present-day value, which is nearly $21,000. This puts the current value of Mt. Gox coins at more than $2.9 billion. It is possible that the recipients could sell a considerable amount of BTC on the market. This will affect BTC prices which have already been impacted by the collapse of Terra and Three Arrows Capital.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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