Mt. Gox's $8.5B Bitcoin Payout Unlikely to Disrupt Market, Say Analysts
Summary:
Analysts suggest that the impending payout of $8.5 billion in Bitcoin by collapsed Japanese crypto exchange, Mt. Gox, to its creditors may not drastically affect Bitcoin prices. They cite reasons including the expected sell-off being priced into current market conditions and many creditors being long-term Bitcoin holders. Galaxy Digital’s Head of Research estimates only 65,000 of 141,000 total Bitcoin will fully enter the market, reducing anticipated selling activity.
Analysts suggest that the anticipated payment of $8.5 billion worth of Bitcoin by Mt. Gox to its creditors in the coming month is unlikely to disrupt Bitcoin prices significantly. Tony Sycamore, an analyst from IG Markets, explained to Cointelegraph that it is difficult to predict the exact influence this move will have given previous market influences. However, he estimates about half of the total Bitcoin, equating to around $4.5 billion, could come into the market from the beginning of July. Mt. Gox, a former Japanese cryptocurrency exchange, experienced a massive breach in February 2014 leading to its collapse. The breach resulted in the loss of approximately 940,000 BTC, equivalent to $64 million at the time. Subsequently, Mt. Gox recovered 141,687 BTC, which currently values at $8.5 billion. This sum is to be disbursed to creditors from July. Sycamore expressed that the current market conditions have likely already factored in the perceived sell pressure from Mt. Gox. He believes the existing challenging market sentiment, technical selling, and Bitcoin ETF outflows are more critical factors currently impacting the market. Furthermore, he noted that a lot of speculative investment has shifted from crypto to large stocks like Apple and Nvidia. In general, Sycamore holds a positive outlook on Bitcoin's price action, expressing confidence in the existence of robust support at the 200-day moving average. In a recent analysis by Galaxy Digital’s Head of Research, Alex Thorn, only 65,000 out of the total 141,000 Bitcoin are expected to enter the market fully—significantly reducing the anticipated selling activity. He also reasoned that majority of the Mt. Gox creditors are likely long-term Bitcoin holders who are poised to hold onto their Bitcoin. Many have reportedly turned down aggressive USD-payout offers, implying a preference for Bitcoin over fiat. Furthermore, Thorn highlighted the potential impact of capital gains tax on sellers. He also hinted at a potentially more substantial selling pressure on Bitcoin Cash since most of the investors ended up with it only due to the Bitcoin hard fork in 2017.
Published At
6/25/2024 5:22:17 AM
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