Increased selling pressure will cause BTC price instability as Mt. Gox will begin refunds in Bitcoin (BTC) and Bitcoin Cash (BCH) in July.
At this point, some analysts believe that users who received their refunded BTC and BCH from Mt.Gox may sell now, However, some experts believe that Mt.Gox’s refund will little impact on price than expected.
Because these analysts do not expect users to sell BTC immediately. Finally, JP Morgan analysts also shared their expectations on the matter.
According to The Block, analysts of JP Morgan It is expected that creditors of Mt. Gox will sell some of their Bitcoin compensation next month. According to analysts, this is possible put pressure on Bitcoin and the cryptocurrency market.
JPMorgan says Mt. Gox creditors likely to sell part of bitcoin receivables next month https://t.co/4FHqKN1suM
— The Block (@TheBlock__) June 27, 2024
Although JP Morgan analysts predicted BTC selling pressure from Mt.Gox, they still expect Bitcoin’s price to be able to Strong recovery again starting from August.
In a recent JPMorgan report, analysts Nikolaos Panigirtzoglou said:
Going forward, downside risks will arise as Mt. Gox creditors begin selling the repaid BTC. Although October is the deadline, we believe that most refunds will be paid out in July.
At this point, assume that most creditors of Mt. Gox were both liquidated in July, which will put crypto prices under further selling pressure and a bearish price trajectory will emerge but we believe prices start to recover from August onwards.”
FTX Could Offset Mt.Gox’s Negative Impact on Bitcoin
While the possibility that creditors will completely sell the BTC repaid by Mt.Gox is widely discussed, analysts expect creditors of bankrupt exchange FTX will receive their payments over the next few months and fuel market growth with the cash they receive.
According to analysts, after FTX refunds creditors, They can support this volatile market by reinvesting the cash received into cryptocurrencies.
This is believed by analysts because FTX’s compensation is completely different from Mt. Gox, they will pay in cash instead of in kind.
While in-kind payments create liquidation risk because some creditors will sell them at a profit, cash payments create positive incentives because most creditors decide to intend to reinvest this amount in crypto assets.
The problem for the cryptocurrency market is the liquidation of creditors of Mt. Gox in July and the reinvestment of FTX creditors in October/November.
Custodia Bank CEO said about BTC: “The price will increase sharply in October
