A bitcoin exchange that collapsed 10 years ago after being hacked is set to return billions of dollars’ worth of the token to users — and it has investors worried.
In a few days, bankrupt Tokyo-based bitcoin exchange Mt. Gox will begin paying back thousands of users almost $9 billion worth of tokens. The platform went under in 2014 following a series of heists that cost it in the range of 650,000 to 950,000 bitcoin, or upward of $58 billion, at current prices.
The payout follows a protracted bankruptcy process that’s involved multiple delays and legal challenges.
On Monday, the court-appointed trustee overseeing the exchange’s bankruptcy proceedings said distributions to the firm’s roughly 20,000 creditors would begin in early July. Disbursements will be in a mix of bitcoin and bitcoin cash, an early offshoot of the original cryptocurrency.
CNBC spoke to half a dozen analysts to get their take on what to expect when roughly 141,000 bitcoin — or roughly 0.7% of the total 19.7 million bitcoins outstanding — are returned to Mt. Gox victims this week.
Pressure on bitcoin could pick up
Mt. Gox — short for “Magic: The Gathering Online Exchange” — was once the largest spot bitcoin exchange globally, claiming to handle around 80% of all global dollar trades for bitcoin.
When it shuttered in February 2014, bitcoin was worth around $600.
Today, the world’s largest cryptocurrency is trading at about $61,000 per coin. That means users opting to be reimbursed in-kind — that is, in the cryptocurrency itself, rather than the cash equivalent — have seen the value of their coins surge over 10,000% in the last decade.
John Glover, chief investment officer of crypto lending firm Ledn, told CNBC the windfall for Mt. Gox users would likely translate to huge sales in bitcoin as investors look to lock in gains.
“Many will clearly cash out and enjoy the fact that having their assets stuck in the Mt. Gox bankruptcy was the best investment they ever made,” said Glover, who was previously a managing director at Barclays. “Some will clearly choose to take the money and run,” added Glover.
James Butterfill, head of research at CoinShares told CNBC the overhang of the nearly $9 billion of bitcoin set to be released has “long been a concern for those with bullish views on bitcoin.”
“Consequently, the market is highly sensitive to any related news. With the announcement that the Trust will begin selling in July, investors are understandably worried,” said Butterfill.
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It wouldn’t be the first time bitcoin’s moved in reaction to big redemptions of funds locked up in centralized trading platforms.
Last month, crypto exchange Gemini returned more than $2 billion worth of bitcoin to users with funds that had been trapped in its Earn lending program, marking a 230% recovery after bitcoin prices more than tripled since Gemini suspended Earn withdrawals on Nov. 16.
JPMorgan analysts linked this to negative price action, saying in a research note last week that it’s “fair to assume that some of Gemini creditors, which are mostly retail customers, have taken at least partial profits in recent weeks.”
Similarly, JPMorgan analysts expect Mt. Gox customers to be similarly inclined to sell some of their bitcoin to profit from seismic gains for the cryptocurrency.
“Assuming most of the liquidations by Mt. Gox creditors take place in July, [this] creates a trajectory where crypto prices come under further pressure in July, but start rebounding from August onwards,” they wrote.
Separately last month, the German government sold 5,000 — worth approximately $305.8 million as of Thursday’s prices — of a 50,000-bitcoin pile seized in connection with the movie piracy operation Movi2k.
Analysts say these crypto liquidations, too, have placed pressure on bitcoin’s price.
Mt. Gox customers expected to hang on to their bitcoin
Most analysts agree losses in bitcoin are likely to be contained and short-lived.
“I think that sell-off concerns relating to Mt. Gox will likely be short-term,” said Lennix Lai, chief commercial officer of crypto exchange OKX.
“Many of Mt. Gox’s early users as well as creditors are long-term bitcoin enthusiasts who are less likely to sell all of their bitcoin immediately,” he said, adding previous sell-offs by law enforcement, including the Silk Road case, did not result in a sustained catastrophic price drop.
Butterfill suggested there’s enough market liquidity to cushion the blow of any possible mass market sell action.
“Bitcoin has maintained a daily trading volume of $8.74 billion on trusted exchanges this year, suggesting that liquidity is sufficient to absorb these sales over the summer months,” said Butterfill.
According to CCData research analyst, Jacob Joseph, the markets are more than capable of absorbing the selling pressure.
“Moreover, a healthy part of the creditors are likely to take a 10% haircut on their holdings to receive the repayment early, and not all holdings are set to be liquidated on the open market, reducing the overall selling pressure,” he said.
Recent price moves suggest the temporary impact of the Mt. Gox repayments may already be priced in, Joseph added.
Galaxy Digital’s head of research, Alex Thorn, believes fewer coins will be distributed than people think, meaning there will be less sell pressure than the market expects.
However, he also wrote in May that, even if only 10% of the bitcoin distributed is sold, “it will have a market impact.”
“Most of the individual creditors will have their coins deposited directly into a trading account at an exchange, making it extremely easy to sell,” Thorn said.
Vijay Ayyar, head of consumer growth for Asia-Pacific at crypto exchange Gemini, said that the overall impact of the Mt. Gox disbursement is likely to be “dissipated,” given the recipients of the funds are varied.
On the one hand, there are individual holders who will get their bitcoin straight away. Then there’s the “significant amount” of bitcoin that will be disbursed out to claims funds, Ayyar said.
“Those funds would then need to distribute these out to their LPs [limited partners], hence the whole process could take a while adding a time element to the impact on price,” he told CNBC.
Macro headwinds behind bitcoin’s fall
It’s worth noting there are plenty of other reasons behind bitcoin’s recent declines.
The cryptocurrency had a stunning rally earlier this year, climbing past $70,000 on the heels of the U.S. Securities and Exchange Commission’s approval of the first spot bitcoin ETF.
Bitcoin’s U.S. dollar price performance, year-to-date.
But investors have remained anxious amid outflows from bitcoin ETFs and sizable market liquidations. The broader macro environment, too, has investors worried.
Earlier this month, the Federal Reserve suggested it plans to cut rates just once this year, down from the multiple cuts it had indicated previously.
Cryptocurrencies, which are inherently volatile, are particularly sensitive to changes in the interest rate environment.
CoinShares’ Butterfill said the Fed’s new rate forecast was among “the likely culprits for the recent price decline” in bitcoin.
This, along with other issues, is “likely to weigh on prices in the lower volume summer months,” Butterfill said. However, “the fundamental investment case remains very much intact,” he added.
National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.
The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.
Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.
“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”
Electrekreported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.
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Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.
The rollout of Supercharger V4 has been a strange one, to say the least.
Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.
Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.
For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although
Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”
Here are the main features of the V4 Cabinet as per Tesla:
Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.
Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.
We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.
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Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.
With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.
A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”
In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.
With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.
Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.
The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.
Hyundai hopes new AI-powered EV boosts sales in China
Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.
Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.
BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.
Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).
Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.
According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs
With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.
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