Crypto News Update: Mt. Gox Refunds to Impact Bitcoin and Bitcoin Cash Differently
Peter Chung, Research Manager at Presto Labs, discussed the potential effects of Mt. Gox’s refund distribution on cryptocurrencies, highlighting differing impacts on Bitcoin (BTC) and Bitcoin Cash (BCH).
Contrary to fears about BTC, Chung argued that its selling pressure from Gox’s bankruptcy is overstated. Instead, attention should focus on BCH, which faces substantial selling pressure due to upcoming refunds totaling $9.5 billion in BTC and 143,000 BCH, valued at about $73 million.
Analyzing CoinGecko data, Chung noted that BCH’s daily transaction volume of $308.8 million sees 24% from redemptions, significantly higher than BTC’s 6%. This translates to BCH experiencing four times the selling pressure compared to BTC.
Chung attributed BTC’s resilience to creditors mostly having exited already, unlike the ongoing selling of BCH, viewed by many as an unexpected “airdrop.”
To hedge against BCH’s volatility, Chung recommended a market-neutral strategy: pairing long BTC perpetuals with short BCH perpetuals, despite funding rate risks. Other strategies include shorting BCH futures or borrowing BCH in spot markets.
While highlighting these strategies, Chung emphasized that these insights are not investment advice.
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Note: The article has been paraphrased and creatively restructured while maintaining the factual content and main points.
