Defunct Bitcoin exchange Mt. Gox has finally announced the final date to begin refunding Bitcoin and Bitcoin Cash (BCH) to affected customers, starting as early as this week.
This eagerly awaited announcement has raised concerns within the cryptocurrency community regarding the potential contribution of these customers to ongoing selling pressure in the Bitcoin market.
Experts Confident In Absorbing Potential Mt. Gox Sell-Off
While some analysts express apprehensions about potential losses in Bitcoin, they generally agree that any sell-off concerns related to Mt. Gox will likely be contained and short-lived.
Lennix Lai, chief commercial officer (CCO) of crypto exchange OKX, believes that many of Mt. Gox’s early users and creditors are long-term Bitcoin enthusiasts who are less likely to sell their entire Bitcoin holdings immediately.
Drawing comparisons to previous sell-offs related to law enforcement actions, such as the Silk Road case, Lai highlights that they did not result in sustained catastrophic price drops.
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Experts, including Jacob Joseph, a research analyst at CCData, suggest that the markets have sufficient liquidity to absorb any possible mass-market sell-off.
Joseph explains that many of Mt. Gox’s creditors may opt to receive early repayment by accepting a 10% reduction on their holdings, which would reduce the overall selling pressure.
Recent price movements indicate that the temporary impact of Mt. Gox repayments may already be factored into the market, further supporting the view that the potential selling pressure could be mitigated.
Varied Recipients And Time Element
Alex Thorn, head of research at Galaxy Digital, believes that fewer coins will be distributed than anticipated, resulting in less sell pressure than expected.
However, Thorn acknowledges that even if only 10% of the distributed Bitcoin is sold, it could still have a market impact. Thorn points out that most individual creditors deposit their coins directly into trading accounts, making them easily sellable.
Vijay Ayyar, head of consumer growth for Asia-Pacific at crypto exchange Gemini, suggests that the overall impact of the Mt. Gox disbursement is likely to be dissipated due to the varied recipients of the funds.
Individual holders will receive their Bitcoin immediately, while a significant amount will be disbursed to claims funds, which will then be distributed to their limited partners. Ayyar mentions that this…
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