Mt. Gox Commences Bitcoin Repayments to Creditors 10 Years After Exchange Failure
Analysts have indicated that the Mt. Gox repayment plan is expected to trigger significant bitcoin selling, although this is anticipated to be brief and followed by further price increases later in 2024 and early 2025. John Glover, the chief investment officer at crypto lending company Ledn, mentioned that the windfall for Mt. Gox users could result in substantial bitcoin sales as investors seek to secure profits. He emphasized that many individuals may opt to cash out, viewing their assets previously stuck in the Mt. Gox bankruptcy as a lucrative investment opportunity. JPMorgan analysts highlighted in a recent report their anticipation of Mt. Gox customers selling some of their bitcoin to capitalize on the cryptocurrency’s substantial gains.
The total amount owed to creditors, which stands at approximately 140,000 bitcoins, represents about 0.7% of the total 19.7 million bitcoins currently in circulation. Analysts have pointed out that while this is likely to impact prices, the market possesses enough liquidity to absorb any significant sell-off. James Butterfill, the head of research at CoinShares, pointed out that the substantial daily trading volume of billions of dollars’ worth of bitcoin on reputable exchanges this year indicates that there is sufficient liquidity to manage these sales during the summer months. Jacob Joseph, a research analyst at CCData, echoed this sentiment, stating that the markets have the capacity to withstand the selling pressure.
Moreover, a portion of the creditors is expected to accept a 10% reduction on their holdings to receive their repayments early, and not all holdings are slated for liquidation on the open market. This strategy is likely to alleviate the overall selling pressure. The general consensus among experts is that the market is well-equipped to handle the potential influx of bitcoins from Mt. Gox creditors. They believe that the liquidity available in the market should help mitigate any adverse effects of the impending sell-off. The prevailing sentiment is that while there may be short-term price fluctuations, the market is resilient enough to absorb the impact of the Mt. Gox repayment plan without experiencing any significant disruptions.
