Friday Newsletter

Explore the latest trends, gain valuable insights, and stay informed in the dynamic cryptocurrency ecosystem.

05 July 2024

Nearly all former creditors of Mt. Gox might be gearing up to sell their Bitcoin, which has surged by over 8,500% in value since the exchange’s collapse a decade ago. The repayment of Bitcoin by the defunct exchange is expected to trigger significant market selling, potentially putting downward pressure on BTC prices.

Finance analyst Jacob King warns that Mt. Gox repayments could introduce $8.2 billion worth of selling pressure to Bitcoin. King shared on July 4 via X that on-chain movements indicate Mt. Gox creditors have already started selling:

“No Bitcoiner will say this out loud, but the majority of the $8.2 billion in $BTC set to be distributed back to ex-clients are going to be sold off.”

This bleak forecast emerged shortly after Mt. Gox began its Bitcoin and Bitcoin Cash repayments on July 5. The repayments are a positive step for the industry and for the users of the collapsed exchange, a sentiment echoed by former Mt. Gox CEO Mark Karpelès in a July 5 X post:

“Mt. Gox customers have finally started receiving Bitcoins! After over 10 years I wasn’t sure anymore if it’d finally happen, but here we are finally!! This has been a long journey and I’m happy to see we’re finally getting there, only a bit more.”

However, concerns are mounting about Bitcoin’s price stability. The cryptocurrency has struggled to gain traction over the past month, trading just above the $60,000 mark. Bitcoin experienced a nearly 18% loss in June 2024, and analysts fear the selling pressure from Mt. Gox creditors could plunge Bitcoin back into bear market territory. King stated:

“I understand this is controversial, but based on the current low demand volume, this will easily send BTC back into a harsh bear market.”

As of July 5, Bitcoin’s price dropped 3.9% in the previous 24 hours, trading at $55,250, with a 10% decline on the weekly chart, according to CoinMarketCap.

More than $9.4 billion in Bitcoin is owed to approximately 127,000 Mt. Gox creditors. Given the significant increase in Bitcoin’s value over the past decade, most creditors are expected to sell and lock in profits. King anticipates around 99% of creditors will sell their BTC:

“I’d say 99% of those on Mt. Gox are going to sell their coins the moment they get it. Imagine billions worth of Bitcoin all being dumped gradually over the next several weeks. There is no way to spin this to be bullish, or news that could offset this.”

Despite the potential market impact, the repayments mark a significant milestone for Mt. Gox’s former users and the broader cryptocurrency community.