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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 around $9 billion worth of Bitcoin, some investors are worried about the potential impact on prices. However, industry experts and major lenders believe that any short-term volatility will be offset by BTC’s optimistic long-term outlook.
With the approval of US spot Bitcoin exchange-traded funds (ETFs), many market experts predict that the market will absorb the newly available tokens.
Bitcoin Optimism Among Market Participants
As reported by our sister site 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 soon, with most applicants ready to receive their tokens before the end of October. However, concerns have been raised regarding the impact of this large-scale distribution on the price of Bitcoin.
According to Bloomberg, major lenders and long-time market participants remain confident in Bitcoin’s resilience despite concerns. Many intend to hold the distributed coins, anticipating continued price appreciation.
Adam Back, CEO of blockchain technology firm Blockstream and a lender himself, emphasizes the “illogicality” of selling at the start of a potential bull market. Back suggests that waiting longer, after a decade-long wait, could yield even greater returns.
According to the company’s CEO Brian Dixon, other lenders such as Off the Chain Capital plan to sell Bitcoin only when “better investment opportunities arise,” recognizing Bitcoin’s historical performance as the best-performing asset in recent years.
Dixon also highlights the significant maturity of the Bitcoin market since the bankruptcy of Mt. Gox. He 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 significant, the distribution will occur over an extended period, making it less actionable in terms of market impact. With around $26.6 billion in daily Bitcoin trading, the distributed tokens are expected to be absorbed without major disruptions.
BCH sales on Mt. Gox distribution?
Lenders do not envisage a simultaneous distribution of tokens to all applicants. Instead, they wait for the administrator to distribute the coins in installments, potentially prioritizing previously filed claims. This approach can mitigate any immediate market pressure.
Furthermore, Galaxy Research estimates that credit funds, which hold approximately 20,000 BTC, are unlikely to make significant sales. Instead, they are expected to distribute Bitcoin to their limited partners (LPs) in kind.
While BTC is expected to resist distribution without major consequences, Bitcoin Cash (BCH) may face more pressure due to less ideological commitment from holders.
Alex Thorn, head of research at Galaxy, suggests that individual lenders owed the majority of tokens to be distributed 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 emerging ETFs. -approved.
While short-term volatility is possible, most stakeholders are confident that Bitcoin’s long-term prospects will outweigh any immediate market impact.
At the time of publication, the largest cryptocurrency on the market is trading at US$67,900, representing a price drop of 1.3% in the last 24 hours.
Featured image from Shutterstock, chart from TradingView.com