Much of the Bitcoin that the defunct exchange Mt. Gox returned to creditors is likely to be sold, putting further downward pressure on Bitcoin’s price.
According to financial analyst Jacob King, the Mt. Gox repossession could add $8.2 billion in selling pressure to the Bitcoin price, with onchain movements indicating that Mt. Gox creditors have already started selling.
“No Bitcoiner says this, but the majority of the $8.2 billion in BTC distributed to Mt.Gox creditors will be liquidated.”
MT. Gox Redemptions have started repaying customers with their #Bitcoin after over a decade! Immediately after this begun, on-chain data showed a hefty increase in selling volume from these wallets.
No Bitcoiner will say this out loud, but the majority of the $8.2 Billion in… pic.twitter.com/VWcxBc43Sk
— Jacob King (@JacobKinge) July 4, 2024
The gloomy prediction came hours after Mt. Gox began refunding Bitcoin and Bitcoin Cash on July 5, raising concerns about the price of Bitcoin, which has struggled to gain ground for over a month and is currently trading below the psychological $60,000 level.
Source: TradingView
Bitcoin has been on a downtrend throughout June, posting a loss of nearly 18% in Q2 2024.
According to the analyst, selling pressure from Mt. Gox creditors is likely to send Bitcoin back into a bear market:
“I understand this is controversial, but based on the current low demand volume, this would easily send BTC back into a harsh bear market.”
Despite the potential selling pressure, the refund is a positive development for the industry and users of the defunct exchange. This view was expressed by Mark Karpelès, former CEO of Mt. Gox, as Bitcoin Magazine reported.
Up to 99% of Mt. Gox creditors could sell
About 127,000 Mt. Gox creditors are waiting to be repaid more than $9.4 billion in Bitcoin after waiting more than 10 years.
Considering that the price of Bitcoin has increased by more than 8,500% over the past 10 years, most bankrupt creditors will likely be looking to take profits.
This is also part of the reason why King believes that about 99% of creditors will sell their BTC.
“I think 99% of Mt. Gox creditors will sell their coins as soon as they receive them. Imagine billions of dollars of Bitcoin being slowly sold off over the next few weeks. There is no way to turn this into optimism, or any news that can make up for this.”
Itadori
According to Cointelegraph
