The bearish pressure associated with the distribution of Mt.Gox assets may be less significant than market participants anticipate. This is the view of Sam Callahan from Swan Bitcoin, as reported by CoinDesk.
“Creditors who wanted to cash out their coins over the past decade had the opportunity to do so by selling their bankruptcy claims. […] Additionally, most clients are likely to hold onto their bitcoins, as their acquisition cost is less than $700 per BTC,” the expert commented.
On June 24, Bitcoin fell below the $60,000 level following the Mt.Gox trustee’s announcement of plans to begin compensation payments in July. The trustee is expected to distribute assets amounting to 142,000 BTC, 143,000 BCH, and 69 billion yen.
The decision comes amid the completion of preparatory processes—ensuring technical support, compliance with regulations in each country, and coordinating transfers with each cryptocurrency exchange.
In January, Mt.Gox confirmed addresses for compensation, and in April, updated the information.
In May, Galaxy Digital estimated that 75% of the coins returned by the platform’s trustee were chosen by owners to receive early payment in kind at a discount.
While the market may believe that nearly all 141,868 BTC will enter circulation this year, analysts expect the amount to be significantly less. It is anticipated that 64,697 BTC will be allocated to individual creditors, and another 30,000 BTC to claims funds and participants in separate bankruptcy proceedings.
“It can be assumed that most of the bitcoins received by the funds will be distributed to shareholders in kind rather than sold. As a result, the initial pressure may come from individual creditors (64,697 BTC),” the experts emphasized.
Alex Thorn, head of research at Galaxy, specifically noted that 20,000 creditors from the pool of nearly 65,000 BTC are early adopters of digital gold who have historically held onto it (11% of the supply has not moved for more than five years).
~25K BTC from Mt Gox has moved in the last hour, likely the beginning of distributions to creditors
i sent a note to GLXY clients & counterparties a couple weeks ago with estimated payout amounts
i personally expect most BTC gets hodl’d, but i can’t say the same for the BCH pic.twitter.com/0f0LWOqGtc
— Alex Thorn (@intangiblecoins) May 28, 2024
According to the expert, most in this category acquired Bitcoin at $451 or lower—they remained holders despite several bear markets over the past decade.
He also highlighted the implications of capital gains tax, as the asset’s growth since then has been at least 1400%.
Amid the news from Mt.Gox, the digital gold dominance index fell at the fastest pace in the past five months—by 1.8%, to 54.34%.
Former owner and head of the exchange Mark Karpeles does not expect mass sales of the distributed bitcoins by the platform’s clients.
In April, K33 highlighted the risks to the first cryptocurrency’s rate from Mt.Gox payouts. They noted that the prospect of a 142,000 BTC overhang could “scare the market.”