What Will Happen to the Bitcoin Price After Mt. Gox Distributes BTC?

By Deepika Jun 25, 2024 #cryptocurrency
What Will Happen to the Bitcoin Price After Mt. Gox Distributes BTC?

Mt. Gox Bitcoin Distribution: Fears of Market Crash Overblown, Experts Say

Mt. Gox, a former cryptocurrency exchange, is set to distribute Bitcoin (BTC) worth billions of dollars to its creditors in July. This has raised concerns about a potential sell-off and a subsequent drop in Bitcoin’s price.

However, traders and analysts believe that the selling pressure from these repayments may be less severe than anticipated, easing concerns about an immediate selloff.

Not All Distributed BTC Will Be Sold

According to Galaxy Research, a significant portion of the distributed Bitcoin may not be immediately sold. Most of these coins will likely be held by creditors due to their low-cost basis. This means that many creditors acquired their Bitcoin at a much lower price than its current market value, and therefore have little incentive to sell at a loss.

Creditors Had Ample Time to Sell

Sam Callahan, a senior analyst at Swan Bitcoin, notes that creditors who wanted to sell their Bitcoin have had over 10 years to do so by selling their bankruptcy claims to investors. “It’s likely that those who remain as creditors are long-term investors who are not looking to sell,” he said.

Funds May Distribute BTC to Investors, Not Sell

Galaxy Research also suggests that funds that acquired claims from creditors may distribute the Bitcoin they receive to their own investors, rather than selling it. This would further reduce the amount of Bitcoin available for sale in the market.

Bitcoin Price Impact May Be Limited

As a result of these factors, the impact on Bitcoin’s price from the Mt. Gox distribution is likely overblown, according to Callahan. The selling pressure may be limited, and the price could remain relatively stable.

Disclaimer: It’s important to note that the actual impact of Mt. Gox’s Bitcoin distribution on the market remains uncertain. However, the insights from traders and analysts suggest that the initial concerns about a major sell-off may be exaggerated.

By Deepika

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