The head of research at crypto financial services firm Galaxy is allaying fears that the highly anticipated Mt.Gox repayments could trigger the collapse of Bitcoin (BTC).
In a new interview on the Unchained Podcast YouTube channel, Alex Thorn says that the defunct crypto exchange Mt.Gox is slated to repay creditors about 142,000 BTC worth nearly $9 billion starting in July up to October.
News of Mt. Gox’s imminent BTC disbursement sent shockwaves to the crypto markets last week, triggering over $313 million in liquidations.
But Thorn says the fear surrounding the Mt. Gox saga is likely overblown as his research indicates that less than half of the coins will likely be available to be sold on the open market upon issuance. He also says that the recipients are likely to hold on to their BTC stack instead of selling right away.
According to Thorn, individuals set to receive their BTC in the coming months have agreed to accept a 10% to 11% haircut to avail of Mt. Gox’s early payout scheme. Thorn estimates that 75% of creditors accepted the deal, bringing the number of BTC for delivery down to 94,600 coins.
The Galaxy executive goes on to note that many people previously sold their bankruptcy claims to funds at a discount. According to Thorn, funds were aggressively buying claims from Mt. Gox users who did not want to wait years before seeing a single cent of their money.
“A lot of people did sell their coins and we think about 20,000 of the Bitcoin is held in these funds. So let’s set that aside for a second. So now we’re down to 74,000 coins.”
Thorn notes that the funds that bought the bankruptcy claims are unlikely to be big sources of selling because he believes the entities that provided liquidity to purchase the claims are going to hold the coins once released.
“My understanding in talking to some of them is that they all plan to deliver in kind to their LPs (liquidity providers)… Again in talking to some big LPs in these funds as well as some of the funds that these LP bases are almost entirely comprised of high-net-worth Bitcoiners who effectively want Bitcoin at a discount… In doing some diligence on this, we’re pretty sure this is actually diamond-handed people who wanted to stack at a discount.”
According to Thorn, the last cohort that will receive BTC from Mt. Gox is the crypto exchange Bitcoinica. Thorn says the exchange is set to collect 10,000 BTC but notes Bitcoinica can’t sell its Bitcoin trove right…
Click Here to Read the Full Original Article at Bitcoin News – The Daily Hodl…
