Markets
JPMorgan Predicts Potential Crypto Market Crash Due to Monte Gox Lender Sales
Bitcoin (BTC) has hit a snag in its 2024 bullish journey, facing setbacks fueled by reversal of flows into spot BTC ETFs. The recent trend suggests a bearish trend as more than 140,000 Bitcoins are expected to flood the market, amplifying the ongoing sell-off concerns triggered by the antiquated Mount Gox. Selling Bitcoin.
Here’s the story.
market nervousness
One of the shadows hanging over Bitcoin’s price stability is the imminent sale of Bitcoins by Mt. Gox, expected to begin in July. JPMorgan analysts indicate that this could put initial downward pressure on prices, with a recovery potentially expected in August. The situation is further complicated by the influx of $11 billion in fiduciary compensation to FTX’s creditors, a portion of which could return to the market.
JUST IN: JPMORGAN SAYS “DOWNLOAD RISK LOOMS” – EXPECTS MT GOX CREDITORS TO DIVIDE PART OF THEIR SHARES, PUTTING SELLING PRESSURE ON THE MARKET IN JULY
– BSCN Headlines (@BSCNheadlines) June 27, 2024
What does history tell us?
Looking at past events, how lenders Gemini Earn liquidating part of their crypto assets has depressed the price of crypto since May 29th. JPMorgan’s Bitcoin Futures Position Indicator, based on CME futures, suggested that retail clients rather than institutional investors have been primarily selling their crypto holdings.
About that, Mount Gox Creditors are set to receive 142,000 bitcoins, worth about $9 billion at current prices, from July to October. Despite the October deadline, JPMorgan analysts believe most refunds will occur in July. This could lead to greater market pressure in July, with a potential recovery from August onwards.
Future perspectives
Looking ahead, FTX’s creditors are expected to receive substantial cash payments estimated at between $14 billion and $16 billion following the approval of its liquidation plan in October. Unlike previous in-kind repayments to other lenders, these cash injections could inject positive momentum into crypto markets as recipients consider reinvesting in digital assets.
The recent market reaction was swift and severe, with Bitcoin witnessing a 7.5% correction, falling below the $61,000 mark on June 27, 2024, settling at $60,720. As July approaches, investors’ attention remains fixed on whether Bitcoin will re-emerge or plunge further into uncertainty by the end of the month.
What will you do with your crypto holdings in July?