Analysts suggest that Mt. Gox’s repayment of $8.5 billion worth of Bitcoin to creditors next month may not have as much of an impact on the price of Bitcoin as expected. It is estimated that around half of the total Bitcoin, approximately $4.5 billion worth, could hit the market starting in July. Despite this potential flood of Bitcoin, analysts believe that much of the sell pressure from Mt. Gox has already been factored into the current market conditions.
IG Markets analyst Tony Sycamore believes that the repayments have been anticipated for a long time and that market sentiment, technical selling, and outflows from Bitcoin ETFs have already contributed to the current state of affairs. He also noted that much of the speculative “hot money” in the crypto market has shifted to mega-stocks in the equities market.
Sycamore expressed optimism about Bitcoin’s price action, pointing to strong support on the 200-day moving average and suggesting that the recent sell-off may not go much deeper. He attributed the recent drop to a combination of factors, including the expectation of Mt. Gox selling.
Galaxy Digital’s head of research, Alex Thorn, estimated that only 65,000 of the total 141,000 Bitcoin from Mt. Gox will actually hit the market, as many creditors have opted for an early payout. Thorn also mentioned that most creditors are long-term Bitcoin holders who are more likely to hold onto their Bitcoin rather than sell it. He highlighted the impact of capital gains tax on sellers and noted that many claim holders have seen significant gains since the recovery of their Bitcoin.
Thorn suggested that the selling pressure on Bitcoin Cash (BCH) would likely be worse, as many investors received BCH through the hard fork of Bitcoin in 2017.