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Bitcoin down 5% ahead of Mt Gox payouts - YAHOO FINANCE
Bitcoin experienced a 5% drop in the past week as traders speculate that upcoming creditor payouts from the bankrupt MT Gox exchange could impact the cryptocurrency market.
The civil rehabilitation trial surrounding the Tokyo-based bitcoin exchange has concluded and payouts to creditors are scheduled to begin this Friday, March 10.
However, there are fears that the 142,000 bitcoin to be released to creditors could be dumped on the market as soon as they become available.
The magnitude of a possible $3bn bitcoin payout has led crypto-analysts to warn of a possible market shock where recipients dump their newly acquired bitcoin en masse after taking back ownership of their coins.
The amounts to be dispensed are 142,000 BTC (BTC-USD), 143,000 bitcoin cash (BCH-USD), and 69 billion Japanese yen (JPY=X).
However, the total amount of assets to be paid out to creditors after the 2014 hack of the MT Gox exchange will not be released to creditors immediately, but at stages over the coming months.
Any resulting increase in bitcoin supply could drive prices lower at a time when the market is already facing stern headwinds from the recent problems at Silvergate bank, and the upcoming Shanghai upgrade of the Ethereum network (ETH-USD).
Stock in the crypto-friendly Silvergate bank (SI) is down 95% over the past year, and it is facing US regulatory probes due to the collapse of significant clients such as FTX and related hedge fund Alameda Research.
Ethereum's Shanghai upgrade will allow those who have 'staked' their ether to withdraw it, giving them the option to sell on the market again. Staking is the process of locking ether on the blockchain for a set amount of time to validate the network.
The MT Gox creditors have waited nearly a decade to get a portion of their money back after hackers stole 850,000 bitcoin from the MT Gox exchange in 2014.
Only a portion of the total amount of stolen bitcoin has been retrieved, resulting in a pay-out of only 21% of each creditor's original claim.
With headwinds increasing, both bitcoin and ether are starting the week off flat, with the world’s largest digital asset at $22,416, and ether at $1,569.
