Mt. Gox Repayments Could Trigger Further Bitcoin Sell-Off

The repayment of Bitcoin by the now-defunct Mt. Gox exchange is expected to create significant selling pressure, potentially pushing Bitcoin prices down.

Financial analyst Jacob King estimates these repayments could introduce $8.2 billion worth of Bitcoin into the market, primarily through selling. On-chain data suggests that Mt. Gox creditors have already begun selling.

Mt. Gox Redemptions have started repaying customers with their #Bitcoin after over a decade! Immediately after this begun, on-chain data showed a hefty increase in selling volume from these wallets.

No Bitcoiner will say this out loud, but the majority of the $8.2 Billion in… pic.twitter.com/VWcxBc43Sk

— Jacob King (@JacobKinge) July 4, 2024

This development has raised concerns about Bitcoin’s price stability, which has been struggling and trading just above the $55,000 mark, experiencing an 20% loss in the second quarter of 2024.

King suggests that the market selling by Mt. Gox’s creditors could push Bitcoin back into a bear market due to the current low demand volume.

Despite the potential market impact, the repayments are seen as a positive step for the industry and Mt. Gox’s users, with former CEO Mark Karpelès expressing relief that customers are finally receiving their Bitcoins after over a decade of waiting.

Approximately 127,000 creditors are owed over $9.4 billion worth of Bitcoin. Given the significant increase in Bitcoin’s value over the past decade, many creditors are expected to sell their assets to lock in profits.

King anticipates that up to 99% of these creditors will sell their Bitcoin, leading to billions being gradually dumped over the next several weeks.