The long-awaited repayments from defunct cryptocurrency exchange Mt. Gox could cast a shadow over Bitcoin’s price, according to analysts. With over $8.2 billion worth of Bitcoin slated to return to creditors, concerns are rising about a potential sell-off that could push the world’s leading cryptocurrency back into a bear market.
Finance analyst Jacob King believes the vast majority of this Bitcoin will hit the market. In a recent post, King stated, “No Bitcoiner will say this out loud, but the majority of the $8.2 Billion in $BTC… are going to be sold off.” This prediction comes just hours after Mt. Gox officially began repaying its debts in Bitcoin and Bitcoin Cash.
King’s analysis points to a potential reversal of Bitcoin’s recent struggles. The cryptocurrency has been on a downward trend for the past month, with a nearly 18% loss in Q2 2024. The analyst suggests the Mt. Gox sell-off could be the catalyst that pushes Bitcoin back into a bear market, stating, “This will easily send BTC back into a harsh bear market.”
Supporting this concern is Bitcoin’s recent price action. In the 24 hours leading up to July 5th, the price dropped nearly 4% to $55,250. This adds to a weekly decline of over 10%, according to CoinMarketCap data.
However, despite the potential negative impact on price, the repayments mark a positive development for Mt. Gox users who have waited over a decade to recover their funds. Mark Karpelès, the former CEO of Mt. Gox, echoed this sentiment in a post, stating, “Mt. Gox customers have finally started receiving Bitcoins! This has been a long journey and I’m happy to see we’re finally getting there…”
The potential selling pressure stems from the massive gains Bitcoin has experienced in the past decade. With a price increase of over 8,500%, it’s understandable that many creditors will look to cash in on their windfall. Analyst King anticipates up to 99% of creditors selling their Bitcoin, stating, “Imagine billions worth of Bitcoin all being dumped gradually… There is no way to spin this to be bullish.”
With over $9.4 billion owed to approximately 127,000 creditors, the coming weeks could be crucial for Bitcoin‘s price stability. Only time will tell if the Mt. Gox repayments trigger a major sell-off or if the market can absorb this influx of Bitcoin.
