Mt. Gox repayments won’t be as bad for Bitcoin as you think – Cointelegraph

Mt. Goxs scheduled repayments of $8.5 billion worth of Bitcoin to creditors in July may not cause as much mayhem for the price of Bitcoin as many expect, say analysts.

IG Markets analyst Tony Sycamore told Cointelegraph there were simply too many historical factors to make a concrete prediction about the impact of the upcoming repayments, but estimated around half of the total Bitcoin (BTC) worth roughly $4.5 billion could be set to hit the market in July.

Mt. Gox was a Japanese cryptocurrency exchange that collapsed after being hacked in February 2014. The exchange lost around 940,000 BTC, which was worth just $64 million at the time.

Mt. Gox recovered 141,687 BTC to return to its creditors, which is worth $8.5 billion at the time of publication. This sum will start to be paid out to creditors at the beginning of July.

Despite the potential upcoming flood of Bitcoin onto the market, Sycamore said he believes that much of the supposed Mt. Gox sell pressure is already priced into the current market conditions.

The repayments have been coming for a long time, he said.

The repayments are happening against the backdrop of deteriorating market sentiment, technical selling, and outflows from the Bitcoin ETFs, said Sycamore, adding that much of the speculative hot money in crypto had left to chase greener pastures in mega-stocks like Nvidia and Apple in the equities market.

Speaking to Bitcoins price action more broadly, Sycamore said hes not convinced that the current sell-off can plunge too much deeper. He pointed to strong support on the 200-day moving average as a reason for optimism in the coming weeks.

I think weve just had a flush. The cause of the flush is all of these effects culminating in the expectations of Mt. Gox selling, he said, adding:

In a June 25 poston X, Galaxy Digitals head of research, Alex Thorn, estimated that only 65,000 of the 141,000 total Bitcoin stands to actually hit the market, significantly reducing much of the expected selling activity.

Related: 4-week correction for Bitcoin? Mt. Gox, Germany gov't add sell-pressure

Thorn predicted that roughly 75% of creditors have opted to receive an early payout, sacrificing 10% of their repayment in the process and resulting in an approximate 95,000 BTC hitting the market initially.

He added that 20,000 BTC is owed to claims funds, and roughly 10,000 BTC is owed to Bitcoinica BK, leaving just 65,000 to regular creditors.

Additionally, Thorn explained several reasons for believing that individual Mt. Gox creditors would be more diamond-handed than the market expects.

He noted that most of the creditors were skewed toward being long-term Bitcoiners who are more likely to hold their Bitcoin and stressed that many individual creditors resisted years of compelling and aggressive offers from claims offering payouts in United States dollars, suggesting they wanted their Bitcoin back, not fiat currency.

He also pointed to the impact of capital gains tax on sellers, saying that while original creditors receive only a 15% in-kind recovery, many claim holders have notched a 140 times gain since the bankruptcy proceedings recovered their Bitcoin.

Thorn said the potential selling pressure on Bitcoin Cash (BCH) would likely be far worse since many investors never actually bought BCH outright, only receiving it due to the hard fork of Bitcoin that occurred in 2017.

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Mt. Gox repayments won't be as bad for Bitcoin as you think - Cointelegraph

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