Mt. Gox Repayments Impact Analysis

The upcoming $8.5 billion Mt. Gox creditor repayments in Bitcoin may not have as significant of an effect on the overall Bitcoin price as some anticipate, according to analysts.

• IG Markets analyst Tony Sycamore mentioned that historical factors make it challenging to accurately predict the impact of the repayments, but around $4.5 billion worth of Bitcoin could enter the market starting in July.
• Mt. Gox, a Japanese cryptocurrency exchange that suffered a hack in 2014, lost about 940,000 BTC valued at $64 million at the time.
• The exchange was able to recover 141,687 BTC to repay creditors, currently valued at $8.5 billion, with repayments beginning in July.
• Sycamore believes that much of the expected Mt. Gox selling pressure has already been factored into current market conditions.

Galaxy Digital’s head of research, Alex Thorn, suggested that only around 65,000 of the total Bitcoin from Mt. Gox may actually hit the market, significantly reducing selling activity.

Mt. Gox Creditors Expected Behavior

• Thorn mentioned that Mt. Gox creditors, largely long-term Bitcoin holders, are likely to “HODL” their Bitcoin rather than sell.
• Many creditors resisted cash offers over the years, indicating a preference to reclaim their Bitcoin holdings.
• The impact of capital gains tax on sellers and the significant gains made by claim holders since the bankruptcy proceedings could deter selling activities.
• Thorn suggested that selling pressure on Bitcoin Cash (BCH) may be more severe, as investors did not necessarily purchase BCH but received it through a Bitcoin hard fork in 2017.