- Mt. Gox repayments may add $8.2 billion in Bitcoin selling pressure.
- Analyst predicts most Mt. Gox creditors will sell their Bitcoin.
- Bitcoin price dropped 3.9%, raising concerns of entering bear market territory.
The repayment of Bitcoin by the defunct exchange Mt. Gox is expected to create significant selling pressure, potentially pushing the price of Bitcoin lower. Finance analyst Jacob King estimates that the repayments could add $8.2 billion worth of selling pressure on Bitcoin’s price.
Impact of Mt. Gox Repayments
King’s analysis suggests that most Mt. Gox creditors have already begun selling their Bitcoin, as indicated by onchain movements. In a post on July 4, King noted that a large portion of the $8.2 billion in Bitcoin set to be distributed to former clients would likely be sold. This prediction comes shortly after Mt. Gox announced the commencement of its debt repayments in Bitcoin and Bitcoin Cash on July 5.
Potential Market Consequences
The concern arises amidst Bitcoin’s struggle to maintain its value above the $60,000 mark. The cryptocurrency has been in a downward trend for over a month, experiencing a nearly 18% loss in the second quarter of 2024. King warned that the selling activity by Mt. Gox creditors could push Bitcoin back into bear market territory, especially given the current low demand volume.
Despite the potential negative impact on the market, the repayments are seen as a positive development for the industry and for the former users of Mt. Gox. Former CEO Mark Karpelès expressed relief and optimism in a July 5 post, noting the long journey to this point and the eventual return of Bitcoins to their rightful owners.
Looking Ahead
With over $9.4 billion worth of Bitcoin owed to approximately 127,000 creditors, many are expected to sell their holdings to secure profits, considering Bitcoin’s substantial price increase over the past decade. King anticipates that up to 99% of creditors will sell their Bitcoin, potentially leading to significant market impacts in the coming weeks. This mass selling could result in a challenging period for Bitcoin, with prices potentially falling further.
