Analyst Predicts Sharp Sell-off for Mt. Gox $8.2B Bitcoin
The move by the defunct Mt. Gox crypto exchange to repay creditors Bitcoin, whose value has surged over 8500% since its collapse a decade ago. Analysts predict that creditors will likely sell the majority of the Bitcoin repaid.
Finance analyst Jacob King considers the potential of a sharp sell-off from the Mt. Gox creditors, which threatens to accelerate the downside pressure on Bitcoin price, leading to mass liquidation.
Jacob King observes that the Mt. Gox repayments are adding $8.2 billion worth of selling pressure to the market. In a Thursday, July 4 post on X, he said that onchain movements indicate sales from Mt. Gox’s creditors are underway.
Jacob King said that Bitcoiners would not admit loudly that most of the Mt.Gox ex-clients would cash on the Bitcoin repayments. Such eventually weighs heavily on the crypto investors’ minds and would prompt mass liquidation.
The gloomy forecast by Jacob King emerged hours after Mt. Gox started repaying the debts owed to ex-clients in Bitcoin and Bitcoin Cash (BCH).
Mt. Gox Repayments Threaten Plunging Bitcoin into Bear Territory
The gloomy forecast warns of a potential tumble in the Bitcoin price at a time when the lead crypto struggles to gain traction and momentarily loses the $60,000 psychological mark.
Bitcoin witnessed a slow downtrend last month, slipping nearly to an 18% loss in Q2 2024.
The analyst observes that the selling by Mt. Gox’s creditors will ultimately plunge Bitcoin into bear territory. He adds that while the prediction is controversial, the market is witnessing low demand volume that would worsen with a sharp sell-off, sending Bitcoin into the harsh bear market.
The Bitcoin tumbled 3.9% in the past 24 hours to exchange hands at $55,250 by 10:17 am UTC. CoinMarketCap data shows Bitcoin is still 10% on the weekly run.
Beyond the selling pressure, Mt.Gox repayments portray a positive development for the crypto industry and a reprieve for the defunct exchange’s users. The former Mt. Gox chief Mark Karpelès echoed the sentiment in a July 5 post on X, hailing the repayments of Bitcoin to the customers.
Karpelès confirmed that Mt. Gox customers will finally receive the Bitcoins to end the long wait. The former chief indicated that the ten-year wait was lengthy, casting skepticism that repayments would happen.
99% of Mt. Gox Creditors to Sell Bitcoin
King notes that 127,000 ex-clients of Mt. Gox are owed more than $9.4 billion and have waited a decade to recover the funds.
The analyst considers that with the Bitcoin price surging by over 8,5000 during the decade the clients have waited, most will seek profits through sharp sell.
The pursuit of profits is partly why the finance analyst predicts that 99% of the creditors will sell the Bitcoins.
King considers that 99% of the Mt. Gox ex-clients will sell the Bitcoin upon receipt. He imagined that with billions likely dumped into the market, that could drag it into bearish territory.
King considers that the market can neither spin the potential dumping into a bullish forecast nor offset the downward pressure.
Blockchain analytics firm Arkham Intelligence reveals Mt. Gox moved 47,228 Bitcoin from its cold storage wallet in a Thursday, July 4 post on X.
Arkham confirms that the transfer will come hours after Wednesday after Mt. Gox Trust executes test transactions. The repayments come after the extensive preparations to disburse 142,000 Bitcoin and 143,000 Bitcoin Cash (BCH).
The repayment is a positive development that will resolve the decade-long wait by the ex-clients since the Japanese crypto exchange collapsed in 2014.
The Mt. Gox repayment is projected to add to the headwinds, dampening the investor sentiment. It coincides with the tensions arising from the move by the German government to transfer Bitcoin-seized assets to crypto exchanges.
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