Analysts Assess the Impact of Mt.Gox Refunds on Bitcoin Price! “It’s Overrated!”
Analysts are suggesting that the selling pressure caused by Mt.Gox’s Bitcoin redemptions may not be as significant as expected.
Bitcoin, the leading cryptocurrency, experienced a decline at the beginning of the week, and the situation worsened with a recent development in the Mt.Gox incident, commonly referred to as the Bitcoin nightmare.
BTC’s price plummeted after the announcement that Mt.Gox trustee would initiate refunds in July.
While the decline is attributed to concerns about the selling pressure that Mt.Gox refunds could create, analysts believe that this pressure might not be as intense as anticipated.
In this regard, Galaxy Research stated that a substantial portion of the Bitcoin distributed as part of the Mt.Gox refunds may not be immediately sold.
“Out of the total 141,000 BTC allocated for Mt.Gox distribution, 65,000 BTC will be given to individual creditors, and 30,000 BTC will be allocated to demand funds. It is reasonable to assume that most of the BTC received by creditors will not be sold to the market but will be distributed in kind.”
Swan Bitcoin’s senior analyst, Sam Callahan, also weighed in on the impact of Mt.Gox refunds on Bitcoin’s price.
Callahan believes that Mt.Gox refunds may be much less significant than what market observers fear:
“The impact of Mt.Gox’s Bitcoin distribution on the Bitcoin price is likely exaggerated,” Callahan told CoinDesk. “Creditors who wish to sell their Bitcoin will have more than 10 years to do so by selling their bankruptcy claims to long-term investors. Moreover, most creditors will probably hold onto their BTC because their cost basis is below $700 per Bitcoin.”
Tagus Capital also suggested that the actual selling pressure from Mt.Gox refunds might be more moderate.
“The exact amount of Mt.Gox refunds to be distributed in July was not specified, but these refunds are part of a larger plan that includes 142,000 Bitcoin and 143,000 Bitcoin Cash, as well as fiat currency amounting to 69 billion Japanese yen ($432 million). However, Mt.Gox creditors may opt to keep their Bitcoins rather than sell them, as they are long-term investors who have rejected previous offers for USD payments and could face capital gains taxes on sales.”
*This article does not provide investment advice.
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