Flood of payouts ‘could crash Bitcoin market’
BITCOIN investors could face a fresh round of intense selling pressure as a collapsed Japanese cryptocurrency exchange is forced to pay out coins worth $1bn (£765m), experts warn.
The currency, which has already plunged in value from $17,035 in January to $6,449, is set to slide further in the coming weeks as Mt. Gox, a bankrupt Bitcoin exchange, pays out thousands of coins to creditors.
Kim Nilsson, who has led a four-year campaign to reclaim his stake in the defunct exchange, said the flood of payouts threatens to “completely crash the market”. The payouts to Mt. Gox customers who lost vast sums follows an extraordinary digital heist by Russian hackers in 2014.
Mt. Gox will distribute the 160,000 Bitcoins it holds to customers at current valuations. Investors who lost money have until Oct 22 to file claims. That could trigger sales of Bitcoins worth $1bn.
A lack of willing buyers could exacerbate the recent price crash, warned Mr Nilsson, a former Mt. Gox customer who spearheaded the investigation into the exchange’s bankruptcy.