The anticipated liquidation of Bitcoin by the now-defunct trading platform Mt. Gox is expected to exert additional downward pressure on Bitcoin’s value. Financial analyst Jacob King suggests that the disbursement from Mt. Gox could introduce an extra $8.2 billion in selling pressure on Bitcoin’s market price. Evidence from onchain data suggests that the creditors of Mt. Gox have commenced the sale of their holdings, as noted by King in a post dated July 4.
This somber forecast was made shortly after Mt. Gox initiated the process of settling its Bitcoin and Bitcoin Cash (BCH) debts, as declared on July 5.
**Mt. Gox BTC distribution preview. Source: Jacob King**
In related news, Ether ETFs are considered to be secondary to Bitcoin ETFs, according to a Bloomberg analyst. Questions are being raised as to whether Mt. Gox’s actions will push Bitcoin back into a bear market.
Bitcoin’s price has been wavering, struggling to maintain momentum for more than a month, and is currently hovering above the significant $60,000 mark. The entire month of June saw Bitcoin in a decline, culminating in an approximate 18% loss in the second quarter of 2024.
The selling activity by Mt. Gox’s creditors might drive Bitcoin into bear market conditions once again, King speculates. As of 10:17 am UTC on July 5, Bitcoin’s price had dropped by 3.9%, trading at $55,250. On a weekly basis, the premier cryptocurrency has seen a decline of over 10%, according to CoinMarketCap data.
**BTC/USDT, 1-month chart. Source: CoinMarketCap**
Despite the potential for increased selling pressure, the repayments are being viewed as a positive turn for the industry and the former users of the exchange. This sentiment is shared by Mark Karpelès, the ex-CEO of Mt. Gox, in a post from July 5.
Furthermore, Justin Sun has proposed to purchase the German government’s $2.3 billion Bitcoin holdings to mitigate market impact.
King estimates that up to 99% of Mt. Gox’s creditors might opt to sell. A staggering $9.4 billion in Bitcoin is owed to roughly 127,000 creditors of Mt. Gox, who have been awaiting reimbursement for over a decade. Given the more than 8,500% increase in Bitcoin’s value over the past ten years, it is likely that a majority of these creditors will seek to realize some profits.
**The Mt. Gox scam and Japanese crypto regulation | Cointelegraph Documentary. Source: Cointelegraph**
Lastly, the question remains: Could an impending financial crisis bring an end to the current bullish trend in cryptocurrency?