Is there an influence of the Mt. Gox payout on the markets?

[8up]

The payout of creditors is fixed at $483/bitcoin +6% p.a.

If one wants to hold bitcoin after the payout (I assume most of the creditors are not going to liquidate their bitcoin holdings). Lower bitcoin prices are in ones favor, as the total claims will be calculated in $. Read: If the bitcoin price crashes even further this is good for Mt. Gox creditors, who want to be refunded in bitcoin (firm believers).

If (instead) one is afraid of higher prices (fewer bitcoin refunds), there are basically to options one can take part in now:

a) suppress prices (this is more a whale thingy)
b) hedge against higher prices (basically buy the expected refund now).

As prices are calculated in $ there seems to be no incentive for people with fiat in gox to play the market atm.


Might this be the reason, we are not seeing any significant price action for quite a time.

Personally, I'd like to see lower prices at around the payout. I am afraid whales are not strong enough to hold the price down till the payout. And if they fail, it easily could lead to a front-runner effect. The first, who hedges against higher prices hedges the best.



Could you please check, if there is a fallacy in my thinking?

[ensurance982]

Not an expert... I'm trying to understand this better. So why did they fix the price at $483/bitcoin!? Who decided which price to pick and what is the basis for doing that? I'm still trying to understand the whole process better.

[Amph]

Not an expert... I'm trying to understand this better. So why did they fix the price at $483/bitcoin!? Who decided which price to pick and what is the basis for doing that? I'm still trying to understand the whole process better.

going with logic, it should be based on the conversion of the value of bitcoin in jpy at that time, when  gox collapsed, there is no other reason

[briguy37]

The full balance data isn't given on the latest balance sheet:

..However, since the investigation of the status of holdings of BTC is still on-going,
such List of Assets and Balance Sheet do not contain BTC held by the bankrupt entity,
or claims for return of BTC (which constitute the bankruptcy claim)..

However, we can still look at the best info we have and make some guesses:

For the the cash side from their document, they have $13,492,903 (1,615,957,277 JPY) but have expected debts of $72,911,955 (8,732,190,301 JPY), so we would only get about a fifth back if it were that alone.

However, we also have the bitcoin side.  They said they have about 202,159.34061488 BTC, and with a little digging they have approximately 750,000 BTC from traders.  So if they distribute funds out after two years, the BTC debt values would be measured at $542.70/BTC which puts the additional debt cash value at $407,000,000.  

Thus, it looks like the total debts to be distributed will be around $480 million if everybody files, and they have about $13.5 million plus about 200,000 BTC to pay for it.


Assuming the above, here's how it would play out if they kept the BTC as BTC, nothing more was retrieved or spent, and they cashed out the BTC to pay the debts at different closing prices:

$100/BTC  --> $43.5 million payout   |   11% cash back    |   435,000 BTC payout   |  49.1% BTC back
$250/BTC  --> $63.5 million payout   |   13% cash back    |   254,000 BTC payout   |  28.7% BTC back
$500/BTC  --> $113.5 million payout |    23.6% cash back |   227,000 BTC payout   |  25.6% BTC back
$1000/BTC --> $213.5 million payout |   44.5% cash back |   213,500 BTC payout   |  24.1% BTC back
$2000/BTC --> $413.5 million payout |   86.1% back        |   207,000 BTC payout   |  23.4% BTC back
$2500/BTC --> $513.5 million payout |   107.0% back       |   205,000 BTC payout   |  23.2% BTC back


Note:  I'm not sure if they'd payout cash percentages over 100%

[SebastianJu]

The payout of creditors is fixed at $483/bitcoin +6% p.a.

If one wants to hold bitcoin after the payout (I assume most of the creditors are not going to liquidate their bitcoin holdings). Lower bitcoin prices are in ones favor, as the total claims will be calculated in $. Read: If the bitcoin price crashes even further this is good for Mt. Gox creditors, who want to be refunded in bitcoin (firm believers).

If (instead) one is afraid of higher prices (fewer bitcoin refunds), there are basically to options one can take part in now:

a) suppress prices (this is more a whale thingy)
b) hedge against higher prices (basically buy the expected refund now).

I think they wont pay out the bitcoins you have at gox directly. It would be stupid too because users would get less at the price of $483. All Numbers are calculated to YPN, including the Bitcoins at $483. And thats, most probably the amount the bitcoins could, if that option will be available then, paid out.

So dropping the bitcoin price wont bring much most probably.

And if someone would want to hedge against the price then there are way than enough exchangs with leverage trading.

[Bit_Happy]

The payout of creditors is fixed at $483/bitcoin +6% p.a.

If one wants to hold bitcoin after the payout (I assume most of the creditors are not going to liquidate their bitcoin holdings). Lower bitcoin prices are in ones favor, as the total claims will be calculated in $. Read: If the bitcoin price crashes even further this is good for Mt. Gox creditors, who want to be refunded in bitcoin (firm believers).

If (instead) one is afraid of higher prices (fewer bitcoin refunds), there are basically to options one can take part in now:

a) suppress prices (this is more a whale thingy)
b) hedge against higher prices (basically buy the expected refund now).

As prices are calculated in $ there seems to be no incentive for people with fiat in gox to play the market atm.


Might this be the reason, we are not seeing any significant price action for quite a time.

Personally, I'd like to see lower prices at around the payout. I am afraid whales are not strong enough to hold the price down till the payout. And if they fail, it easily could lead to a front-runner effect. The first, who hedges against higher prices hedges the best.



Could you please check, if there is a fallacy in my thinking?

Is there a source for this info? I'm not up to date on the latest news from Japan.

EDIT: Here is one source:
MtGox creditors can finally file claims for lost bitcoins
http://www.pcworld.com/article/2913212/mtgox-creditors-can-finally-file-claims-for-lost-bitcoins.html

It's about time! When does Mark finally go to jail for a long time?
Glad to see the bankruptcy is making progress.

[BillyBobZorton]

There is a big psychological game here. Yes, a lot of people will be happy to be able to take control of their Bitcoin again, but some may be very pissed off after this and mindlessly sell and forget about BTC (only to find out they could have retired if they held for a couple more years).

[Brewins]

The payout of creditors is fixed at $483/bitcoin +6% p.a.

If one wants to hold bitcoin after the payout (I assume most of the creditors are not going to liquidate their bitcoin holdings). Lower bitcoin prices are in ones favor, as the total claims will be calculated in $. Read: If the bitcoin price crashes even further this is good for Mt. Gox creditors, who want to be refunded in bitcoin (firm believers).

If (instead) one is afraid of higher prices (fewer bitcoin refunds), there are basically to options one can take part in now:

a) suppress prices (this is more a whale thingy)
b) hedge against higher prices (basically buy the expected refund now).

As prices are calculated in $ there seems to be no incentive for people with fiat in gox to play the market atm.


Might this be the reason, we are not seeing any significant price action for quite a time.

Personally, I'd like to see lower prices at around the payout. I am afraid whales are not strong enough to hold the price down till the payout. And if they fail, it easily could lead to a front-runner effect. The first, who hedges against higher prices hedges the best.



Could you please check, if there is a fallacy in my thinking?

Is there a source for this info? I'm not up to date on the latest news from Japan.

EDIT: Here is one source:
MtGox creditors can finally file claims for lost bitcoins
http://www.pcworld.com/article/2913212/mtgox-creditors-can-finally-file-claims-for-lost-bitcoins.html

It's about time! When does Mark finally go to jail for a long time?
Glad to see the bankruptcy is making progress.

Unless Kobayashi wants to pay from his own pocket there will not be enough money to pay everyone. So I guess the effect of the Gox repay won't be as big as one might think at first

[WhatTheGox]

The payout of creditors is fixed at $483/bitcoin +6% p.a.

If one wants to hold bitcoin after the payout (I assume most of the creditors are not going to liquidate their bitcoin holdings). Lower bitcoin prices are in ones favor, as the total claims will be calculated in $. Read: If the bitcoin price crashes even further this is good for Mt. Gox creditors, who want to be refunded in bitcoin (firm believers).

If (instead) one is afraid of higher prices (fewer bitcoin refunds), there are basically to options one can take part in now:

a) suppress prices (this is more a whale thingy)
b) hedge against higher prices (basically buy the expected refund now).

As prices are calculated in $ there seems to be no incentive for people with fiat in gox to play the market atm.


Might this be the reason, we are not seeing any significant price action for quite a time.

Personally, I'd like to see lower prices at around the payout. I am afraid whales are not strong enough to hold the price down till the payout. And if they fail, it easily could lead to a front-runner effect. The first, who hedges against higher prices hedges the best.



Could you please check, if there is a fallacy in my thinking?

Payouts from gox are bullish even though it seems like it should be bearish due to more coins on the market.  Check the price history vs news when gox were looking fine vs suspect, each time gox were looking ready to reopen the price went up on all exchanges - this was before gox price was under FMV also.

[rememberme]

dump/pump? whats the date?

[NUFCrichard]

It depends completely on how they go about the refund.
If they have 200k bitcoins and decide to only offer cash refunds, then they have to sell 200k bitcoins, which will crash the market.

If they already have the cash and decide to refund in cash, then you have lots of crypto fans with a bit of extra cash in their pockets.  That must result in extra buying, which would be good for the price.

I know that if I get cash, I'll probably put it back into bitcoin, if I get bitcoin, it will stay in bitcoin.  The first is better for the price.

[rememberme]

You say the first is the best as in they refund in cash? = crash?

[Amph]

It depends completely on how they go about the refund.
If they have 200k bitcoins and decide to only offer cash refunds, then they have to sell 200k bitcoins, which will crash the market.

If they already have the cash and decide to refund in cash, then you have lots of crypto fans with a bit of extra cash in their pockets.  That must result in extra buying, which would be good for the price.

I know that if I get cash, I'll probably put it back into bitcoin, if I get bitcoin, it will stay in bitcoin.  The first is better for the price.

they said clearly that you can choose between cash and bitcoin, i doubt everyone will chose cash, many will choose bitcoin for sure

[briguy37]

It depends completely on how they go about the refund.
If they have 200k bitcoins and decide to only offer cash refunds, then they have to sell 200k bitcoins, which will crash the market.

If they already have the cash and decide to refund in cash, then you have lots of crypto fans with a bit of extra cash in their pockets.  That must result in extra buying, which would be good for the price.

I know that if I get cash, I'll probably put it back into bitcoin, if I get bitcoin, it will stay in bitcoin.  The first is better for the price.

I'm guessing a good portion will want their settlement in Bitcoin (that's what I went for at least), but they are very careful to avoid any guarantees so far that this will even be possible:

it may be possible for Users to enjoy certain benefits such as the ability to receive bankruptcy distribution in Bitcoin (this matter has not yet been determined whether
distributions in Bitcoin will be possible, as the bankruptcy trustee is still investigating the matter).

So the extreme cases are:
  1) Everybody goes for refunds in bitcoin, in which case $13 million USD pushes the price up.
  2) Bitcoin refunds are not possible (which is more-likely because one stupid law is all that would take), in which case 200,000 BTC pushes the price down with a rebound when users buy back in with the refund cash.

I'm guessing in case 2 that they would try find a way to prevent a dip in the market like that (private auction instead of just selling at market value on exchanges).

[NUFCrichard]

It depends completely on how they go about the refund.
If they have 200k bitcoins and decide to only offer cash refunds, then they have to sell 200k bitcoins, which will crash the market.

If they already have the cash and decide to refund in cash, then you have lots of crypto fans with a bit of extra cash in their pockets.  That must result in extra buying, which would be good for the price.

I know that if I get cash, I'll probably put it back into bitcoin, if I get bitcoin, it will stay in bitcoin.  The first is better for the price.

I'm guessing a good portion will want their settlement in Bitcoin (that's what I went for at least), but they are very careful to avoid any guarantees so far that this will even be possible:

it may be possible for Users to enjoy certain benefits such as the ability to receive bankruptcy distribution in Bitcoin (this matter has not yet been determined whether
distributions in Bitcoin will be possible, as the bankruptcy trustee is still investigating the matter).

So the extreme cases are:
  1) Everybody goes for refunds in bitcoin, in which case $13 million USD pushes the price up.
  2) Bitcoin refunds are not possible (which is more-likely because one stupid law is all that would take), in which case 200,000 BTC pushes the price down with a rebound when users buy back in with the refund cash.

I'm guessing in case 2 that they would try find a way to prevent a dip in the market like that (private auction instead of just selling at market value on exchanges).

If I can get my bitcoin paid back at $483, then I will take the cash please!
Why would anyone want a $235 bitcoin refund when they can get $483 per bitcoin refund?

I'll take the cash and buy twice the amount of Bitcoin, that'll do me nicely!

[ensurance982]

It depends completely on how they go about the refund.
If they have 200k bitcoins and decide to only offer cash refunds, then they have to sell 200k bitcoins, which will crash the market.

If they already have the cash and decide to refund in cash, then you have lots of crypto fans with a bit of extra cash in their pockets.  That must result in extra buying, which would be good for the price.

I know that if I get cash, I'll probably put it back into bitcoin, if I get bitcoin, it will stay in bitcoin.  The first is better for the price.

They are not dumb. They know perfectly well that's selling all the coins is going to crash the market. I am sure that they will try to return the callings as they are and if this is legally possible in Japan.

[briguy37]

If I can get my bitcoin paid back at $483, then I will take the cash please!
Why would anyone want a $235 bitcoin refund when they can get $483 per bitcoin refund?

I'll take the cash and buy twice the amount of Bitcoin, that'll do me nicely!

I hope that's not what they meant!  I took it to mean they would take the fiat value of your settlement, and then give you an equivalent amount of BTC based on the current market value at the time of distribution.

[ensurance982]

If I can get my bitcoin paid back at $483, then I will take the cash please!
Why would anyone want a $235 bitcoin refund when they can get $483 per bitcoin refund?

I'll take the cash and buy twice the amount of Bitcoin, that'll do me nicely!

I hope that's not what they meant!  I took it to mean they would take the fiat value of your settlement, and then give you an equivalent amount of BTC based on the current market value at the time of distribution.

I believe that is the relative worth of the coins, it is very unlikely that they have enough money to pay out such some to their creditors. You have to keep in mind that the total sum of money they can distribute is very limited people can't be happy if they get a fourth of what they invested back.

[derpinheimer]

I get the feeling a large percent of Gox's "800000" were made up (Willy) and/or idle (Early adopters who forgot about Bitcoin)

When you looked through the logs, there were idle accounts sitting on hundreds and thousands of coins.

So ignoring how much the legal costs are, I'd imagine the payout being up to 50%

[minerpumpkin]

I get the feeling a large percent of Gox's "800000" were made up (Willy) and/or idle (Early adopters who forgot about Bitcoin)

When you looked through the logs, there were idle accounts sitting on hundreds and thousands of coins.

So ignoring how much the legal costs are, I'd imagine the payout being up to 50%

It's a quiet safe bet to assume that those coins never existed. What makes it even more puzzling is the fact that if those coins didn't exist in the first place, the price should actually be a lot higher!