Curriculum·S207 Investing Frameworks (Unleveraged)·about 31 min
Time horizon honesty
By the end of this lesson you can
- →Distinguish an intended horizon from the horizon your obligations actually permit
- →Identify the events that shorten a horizon without warning, and price them
- →Explain why an illiquid or restricted holding can impose a horizon you did not choose
- →Set an allocation from the shortest horizon in your own life rather than the longest
Sophomore · enrolled learners
This lesson opens with The decade nobody chose.
- What happened
- Mt. Gox, then the world's largest bitcoin exchange, applied for civil rehabilitation in Tokyo on 28 February 2014, reporting that about 750,000 bitcoin deposited by users and about 100,000 of its own had disappeared, roughly 850,000 in all, worth about $477M at the exchange rates of the day. On 7 March 2014 it found about 200,000 BTC in an old-format wallet used before June 2011. The court dismissed the rehabilitation application in April 2014 and the case ran as a bankruptcy until June 2018, when a creditor petition put it back into civil rehabilitation. The trustee made the first repayments, in bitcoin and bitcoin cash, on 5 July 2024, more than ten years after the collapse, and with the court's permission moved the repayment deadline in October 2024, October 2025 and October 2026, most recently to 31 October 2027. Because creditors were repaid partly in bitcoin, and bitcoin had risen from roughly $600 at the bankruptcy to over $54,000 when repayments began, many received far more in dollar terms than their coins had been worth in 2014.
- The decision point
- We cannot know each creditor's plan, but it is a safe inference that almost none deposited with ten years in mind. The favorable dollar outcome was produced by an asset appreciating during a period of enforced holding, not by the process working, and anybody who needed those funds in 2015, or 2018, or 2021 experienced the same event as a total loss for the period that mattered to them.
- Recorded loss
- $477,000,000
What you will be able to answer
- →What determines your real horizon?
- →Name the events that shorten a horizon without warning.
- →How can a holding impose a horizon you did not choose?
- →Which horizon should set your allocation?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.nbcnews.com/business/markets/mt-gox-begins-repaying-bitcoin-creditors-decade-after-collapse-rcna160489
- https://www.mtgox.com/img/pdf/20140228-announcement_eng.pdf
- https://www.mtgox.com/img/pdf/20140320-btc-announce.pdf
- https://www.mtgox.com/img/pdf/20140416_002_announce_en.pdf
- https://www.mtgox.com/img/pdf/20180622_announcement_en.pdf
- https://www.mtgox.com/img/pdf/20240705_01_announcement_en.pdf
- https://www.mtgox.com/img/pdf/20261016_b3a13e0f-55f6-4653-913b-be80762390e8_announcement_en.pdf
- https://techcrunch.com/2014/02/28/mt-gox-files-for-bankruptcy
- https://research.glassnode.com/the-week-onchain-week-31-2024/
- https://www.dalbar.com/PressReleases/doc/2025QAIBPressRelease.pdf
- https://www.arnoldporter.com/en/perspectives/advisories/2023/01/read-before-you-click-accept
Confidence high·Volatility medium·Reviewed 2026-08-06·Owner unassigned
Contested
F107-04 uses Mt. Gox to teach counterparty risk measured in time. This lesson uses it for horizon imposition. Keep the split; the counterparty analysis belongs in F107-04.
That creditors did well in dollar terms is true and is a consequence of the asset appreciating during enforced holding rather than of the process functioning. Do not present it as a reassuring outcome.
The counts differ by source and date. Mt. Gox's own announcements give about 850,000 BTC missing (750,000 users', 100,000 its own) and about 200,000 found in March 2014. CNBC, published by NBC News, says up to 950,000 missing and 140,000 recovered, and Glassnode puts the recovered coins being distributed at about 141,686. These sources do not reconcile the 200,000 found with the 141,686 distributed, and this lesson does not try to; it teaches the 850,000 and 200,000 from the company's own notices. The $477M is TechCrunch's conversion at the exchange rates of 28 February 2014; other contemporaneous outlets gave somewhat different conversions.