Alarm in Bitcoin: 135,000 BTC stuck in Mt. Gox are "a blast from the past"

Before the bankruptcy of Terra, Celsius and Three Arrows Capital, with the fund freezes and groups they established on their clients' funds, in the short history of Bitcoin, the Mt. Gox cryptobroker case has the honorable privilege of being the first major cryptoasset company to fail in history. The ramifications of that event reach into today and may explode the current bear market, warn experts at Julius Baer, who call the court ruling on the fate of part of the Bitcoins lost in that liquidation a "blast from the past."

Many investors who entered the crypto space during the last two years or so may have heard of the cryptocurrency trading platform Mt. Gox, which was headquartered in the special Shibuya region of Tokyo, Japan. Launched in 2010, it came to control around 70% of all transactions made with Bitcoin (BTC). Four years after its launch, it established itself as one of the largest Bitcoin exchange platforms in the world.

However, in February 2014, the company began to present problems and suspended cryptocurrency trading, stating that more than 850,000 Bitcoins were hacked from its accounts. A sum that by that time, represented an average of about $470 million. So, later in the month of April, Mt Gox was forced to begin the liquidation process.

Years of litigation later, more than 135,000 Bitcoins were recovered, which will soon be paid to creditors in the form of dollars or BTC, according to the administrator's announcement. "If a large portion of creditors decide to receive payment in fiat currency, there could be further selling pressure for the leading digital asset and the asset class in general," they warned from Julius Baer. "Higher than expected US inflation in June could point to a persistent negative macroeconomic environment for cryptocurrencies, which, coupled with factors specific to this market, such as the Mt. Gox case, argues against a quick and sharp rebound in the near term."

Given that at the time of mining each BTC token was worth less than 5% of its current value, this announcement by the administrator raised fears that a large portion of creditors may decide to be paid in fiat currency rather than cryptocurrencies, seeking a substantial capital gain. Fears are that it will result in an overwhelming amount of Bitcoins coming to market and drive further selling pressure on the leading digital asset, at an already difficult time.

This news comes as the market mood remains very bearish, which means that "more negative news could be taken as a trigger for more selling," the Swiss entity pointed out. Given that correlations between cryptocurrencies remain high in recent weeks, any pressure on BTC would also likely have knock-on effects for altcoins.

These experts alluded to the market reaction following the release of US inflation data. $15 billion flew off Bitcoin´s price in a matter of minutes. Around $50 billion vanished from cryptos in general at the same moment, in a clear sign of how pressured prices are amid fears of further and more aggressive monetary policy tightening by the US Federal Reserve (Fed).

"This environment led to strong headwinds for cryptocurrency markets since the beginning of the year and, along with 'crypto'-specific developments such as the release of tokens recovered from the Mt. Gox exploit, stands in the way of a near-term price rally," the experts noted. The market in general believes that more companies in this sector may go bankrupt and that the destination of Bitcoin's falls is at least $13,000.