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How will Mt. Gox’s Bitcoin distribution affect cryptocurrency prices? — TradingView News
As defunct cryptocurrency exchange Mt. Gox prepares to distribute approximately $9 billion worth of Bitcoin, some investors are concerned about the potential impact on prices. However, industry experts and major creditors believe that any short-term volatility will be offset by BTC’s long-term bullish outlook.
With the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, many market experts predict that the market will absorb the newly available tokens.
Bitcoin optimism among market participants
As reported by our sister website, Bitcoinist, Mt. Gox’s Japanese administrator, Nobuaki Kobayashi, recently announced plans to begin distributing Bitcoin and Bitcoin Cash to creditors.
The process is expected to begin shortly, with most applicants expected to receive their tokens before the end of October. However, concerns have arisen about the impact of this large-scale distribution on the price of Bitcoin.
According to Bloomberg, major creditors and long-time market participants remain confident in the resilience of Bitcoin despite concerns. Many intend to hold the distributed coins, expecting continued price appreciation.
Adam Back, CEO of blockchain technology company Blockstream and himself a creditor, points out the “illogicality” of selling at the start of a potential bull market. Back suggests that waiting longer, after a ten-year wait, could generate even greater returns.
According to the company’s CEO, Brian Dixon, other creditors, such as Off the Chain Capital, plan to sell Bitcoin only when “better investment opportunities arise”, recognizing Bitcoin’s historical performance as the most valuable asset. most efficient in recent years.
Dixon further highlights the significant maturation of the Bitcoin market since the Mt. Gox bankruptcy. It argues that the potential impact of distribution, although substantial in volume, is unlikely to have a lasting effect on prices.
Cosmo Jiang, portfolio manager at Pantera Capital, notes that while the amount is large, the distribution will be over an extended period of time, making it less actionable in terms of market impact. With approximately $26.6 billion in daily Bitcoin trading, the distributed tokens are expected to be absorbed without major disruption.
BCH Sales to Mt. Gox Distribution?
The creditors do not anticipate a simultaneous distribution of tokens to all claimants. Instead, they expect the trustee to distribute coins in installments, potentially prioritizing previously filed claims. This approach can alleviate any immediate market pressure.
Additionally, Galaxy Research believes that credit funds holding around 20,000 BTC are unlikely to engage in significant sales. Instead, they should distribute the Bitcoin to their limited partners (LPs) in kind.
While BTC is expected to withstand distribution without major consequences, Bitcoin Cash (BCH) could face more pressure due to the weak ideological commitment of its holders.
Alex Thorn, head of research at Galaxy, suggests that individual creditors who were expected to distribute the majority of tokens this year will likely be the main source of sales, with some choosing to sell their Bitcoin Cash.
In summary, as Mt. Gox prepares to distribute billions of dollars worth of BTC, industry experts and major lenders remain optimistic, citing the maturity of the Bitcoin market, the potential for continued price appreciation, and the availability of Newly approved ETFs.
While short-term volatility is possible, most stakeholders are confident that Bitcoin’s long-term prospects will outweigh any immediate market impact.
At press time, the market’s largest cryptocurrency is trading at $67,900, representing a 1.3% price drop over the past 24 hours.
Featured image from Shutterstock, chart from TradingView.com