The impending distribution of more than 140,000 Bitcoin (BTC) from the defunct Mt. Gox exchange is causing concern in the cryptocurrency market, with many fearing a significant impact on prices. However, Alex Thorn, Galaxy’s head of research, believes that the market impact will be less severe than anticipated. Thorn’s research shows that the selling will mostly come from individual creditors, who are receiving less than half of the total 140,000 Bitcoin. He argues that most individual creditors are long-term Bitcoiners who are unlikely to sell, as they have resisted compelling offers for years and prefer to hold onto their coins.
The announcement of plans to begin returning the stolen assets from the Mt. Gox hack in 2014 led to a sharp decline in crypto prices on Monday, with Bitcoin trading at its lowest level since early May. Thorn’s research suggests that about 75% of creditors will opt for an early payout in July, resulting in a distribution of approximately 95,000 BTC. Of those, 65,000 Bitcoin will go to individual creditors, who Thorn believes are likely to hold onto their BTC rather than sell immediately due to significant capital gains taxes and their history of resisting aggressive offers.
Despite the potential mitigating factors, Thorn acknowledges that even a small portion of the 65,000 coins allocated to individual creditors being sold could still have a significant impact on prices in the short term. He also points out that Bitcoin Cash (BCH), which was also recovered from Mt. Gox using its BTC keys to claim the fork, is expected to fare worse than Bitcoin. Due to BCH’s low liquidity and the fact that no creditors originally purchased it, they are likely to sell a significant portion of it, leading to downward pressure on its price.
Bitcoin is currently ranked #1 by market cap, with a market capitalization of $1.19 trillion and a 24-hour trading volume of $43.19 billion. The total cryptocurrency market is valued at $2.23 trillion with a 24-hour volume of $97.58 billion, and Bitcoin dominance is currently at 53.31%. Thorn’s research and analysis provide insight into the potential impact of the Mt. Gox Bitcoin distribution on the cryptocurrency market, offering a nuanced perspective on a highly anticipated event in the industry.
