- The head of research at Galaxy Digital, a crypto financial services firm, addresses concerns over the repayment of Mt.Gox creditors and its potential impact on Bitcoin (BTC).
- The repurchase plan, which involves 142,000 BTC around $9 billion, will occur from July to October, raising concerns in the cryptocurrency market.
- Alex Thorn reassures the community that only less than half of the repaid BTC might hit the market immediately.
Get the full breakdown on why Mt.Gox repayments might not impact Bitcoin prices as feared. Expert insights and detailed analysis included.
Mt.Gox Repayments: What You Need to Know
The defunct Mt.Gox exchange is set to repay its creditors this year, disbursing a substantial amount of BTC. Initial market reactions sparked fears of significant sell-offs, but are these fears justified? According to Alex Thorn from Galaxy Digital, the actual impact might be less dramatic than anticipated. He notes that many recipients of the BTC have chosen to opt for an early payout scheme with a 10-11% haircut, resulting in fewer coins entering the market immediately.
Analysis of Potential Market Impact
Thorn estimates that 75% of creditors have accepted the early payout option, reducing the total BTC disbursement to 94,600 coins. Additionally, some of these Bitcoins were sold to funds that aimed to purchase claims at a discount. Approximately 20,000 BTC are currently held by these funds, further reducing the number of Bitcoins that might be sold quickly. These funds, predominantly associated with high-net-worth individuals and long-term holders, are unlikely to flood the market with a sudden sell-off.
Conclusion
Ultimately, Thorn’s research concludes that only around 64,000 BTC will reach creditors’ trading accounts, and these individuals are likely to hold their assets rather than sell immediately. Therefore, the anticipated market disruption from Mt.Gox repayments may be overestimated. Investors should closely monitor the situation but can find solace in the likelihood that significant sell-offs are not expected. This information provides a clearer outlook for Bitcoin’s price stability in the coming months.
