The long-awaited return of over $9 billion worth of bitcoin from the Mt. Gox era is stirring anticipation and concern in the Bitcoin market.
According to latest Mt Gox news, the now defunct exchange is preparing to distribute a significant sum of digital assets, sparking discussions about its potential impact on bitcoin prices.
Mt. Gox, once a major player in the bitcoin exchange scene, collapsed in 2014 after suffering a devastating hack, leaving 127,000 creditors in limbo.
Anticipated Repayments and Market Anxiety
Analysts at K33 Research caution that the imminent return of Mt. Gox-era bitcoin could unsettle the market and exert negative price pressure on bitcoin. The potential payout of more than $9 billion worth of bitcoin has raised concerns among market observers, with K33 Research highlighting the possibility of a negative impact on bitcoin’s price.
According to K33 Research analysts Anders Helseth and Vetle Lunde, the influx of Mt. Gox coins into the market could create downward pressure on bitcoin’s valuation. They warn:
“Mt. Gox coins could become a relevant negative price contributor in the next weeks.”
Mt Gox News: Updates and Implications
Recent updates provided to Mt. Gox creditors suggest that bitcoin repayments could commence as early as next month. The process is expected to be finished by October 2024.
While creditors may not immediately liquidate their assets, the anticipation surrounding the payout could instill caution among investors, potentially dampening market sentiment.
The analysts highlight that the return of Mt. Gox coins has the potential to significantly impact bitcoin’s price in the coming weeks. The sheer quantity of bitcoin and bitcoin cash involved could unsettle the market, creating what analysts refer to as an “overhang.”
Potential Selling Pressure: Progress and Timeline
While some believe that creditors may opt to hold onto their funds, others fear that the volume of BTC entering the market could trigger a sell-off, leading to a temporary downturn in prices. Helseth and Lunde emphasize:
“Repayments do not necessarily equate to selling pressure, as creditors might opt to hold on to funds, [but it’s] an overhang that might spook the market shortly.”
The Mt. Gox trustees began contacting creditors in January to verify their identities and the exchange accounts used for repayment. Some creditors have already received Japanese yen repayments, while others reported receiving additional fiat transfers in March. The final repayment deadline for base, lump-sum, and intermediate repayments is currently set for October 31, 2024.
Conclusion
As the Mt. Gox creditors eagerly await the return of their funds, the potential impact on bitcoin prices remains uncertain. While some anticipate a temporary downturn due to selling pressure, others remain optimistic about the long-term resilience of the market. Investors are advised to closely monitor developments related to the distribution process and exercise caution amid the uncertainty surrounding Mt. Gox’s payout.
