Traders are not as worried about the potential impact of Mt. Gox’s repayments on the market as previously thought. They believe that the selling pressure from these repayments may not be as severe as expected, which could alleviate concerns about a sudden drop in prices.
According to Galaxy Research, a large portion of the distributed Bitcoin may not be immediately sold. This is because most creditors are likely to hold on to their Bitcoin due to the low cost at which they acquired it. This means that the selling pressure from Mt. Gox’s repayments might not be as significant as anticipated.
Sam Callahan, a senior analyst at Swan Bitcoin, mentioned in an email that the impact on Bitcoin’s price from Mt. Gox distributing Bitcoin may be exaggerated. He explained that creditors who wanted to sell their Bitcoin have had over a decade to do so by selling their bankruptcy claims to long-term investors. Additionally, since most creditors acquired their Bitcoin at a cost basis of less than $700 per Bitcoin, they are likely to hold on to it.
Galaxy Research also noted that out of the total 141,000 BTC set for distribution, 65,000 BTC will go to individual creditors, while 30,000 BTC will go to claims funds and a separate bankruptcy. The firm suggested that most of the BTC received by funds acquiring claims from creditors will be distributed to LPs rather than sold off, which should ease concerns about a potential selloff.
The trustees of the defunct crypto exchange announced that they are getting ready to distribute the Bitcoin stolen from clients in a 2014 hack in the first week of July. While the exact amount of Bitcoin to be distributed is not publicly known, the exchange consolidated 140,000 BTC, valued at around $9 billion, from multiple cold wallets to a single address in May.
The news of the upcoming distribution and potential selling pressure caused Bitcoin to drop over 4% on Monday, briefly dipping below $60,000 for the first time since early May. However, traders and analysts remain optimistic that the impact of Mt. Gox’s repayments on the market may not be as severe as initially feared.
In conclusion, while concerns about the potential selling pressure from Mt. Gox’s repayments have caused a dip in Bitcoin’s price, traders believe that the impact may be less significant than anticipated. Most creditors are likely to hold on to their Bitcoin, which could help stabilize the market in the long run.