Mt Gox Selling Raises Concerns for Bitcoin Investors

Mt Gox's sudden decision to start selling its remaining Bitcoins has left many investors on edge.

The company's plan to sell 300,000 Bitcoins, which is roughly 1% of the total supply, has raised concerns about the market's stability.

Investors are worried that this large sale could drive down the price of Bitcoin, potentially affecting their investments.

In 2014, Mt Gox's CEO Mark Karpelès admitted that the company had lost 850,000 Bitcoins due to a hack, but it's unclear if these missing Bitcoins are included in the 300,000 being sold.

Check this out: Company Uniswap

Mt. Gox creditors have received nearly $4 billion worth of BTC, but most have opted not to sell.

Despite Bitcoin's significant price appreciation, Mt. Gox creditors have not been selling, according to a July 29 Glassnode report. This is likely due to the considerable capital gains impact that selling would have on these creditors.

Mt. Gox creditors have a 140-fold increase in their dollar terms, based on current valuations. This suggests that they are likely to retain their shares rather than sell.

A small percentage (10%) of the 65,000 BTC potentially entering the market would translate to around 6,500 BTC. This figure is considerably lower than some market speculators have feared.

These transactions will be absorbed by the market without significant disruption, due to the robust liquidity of Bitcoin on major exchanges like Kraken and Bitstamp.

Bitcoin Cash (BCH) is poised to face greater volatility due to its significantly lower liquidity and market depth compared to Bitcoin.

Here is a comparison of the potential impact of Mt. Gox distributions on Bitcoin and Bitcoin Cash:

Mt. Gox creditors have had over 10 years to sell their claims, and as of now, there are no distressed or urgent sellers left.

According to Alistair Milne, CIO of Altana Digital Currency Fund, "Mt Gox creditors in need of funds (i.e. weak hands) have had ~10 years to sell their claims." This suggests that the majority of creditors have not sold their assets, likely due to their long-term investment strategy.

Early investors who entered the market before 2013 may be tempted to sell part of their holdings due to the significant increase in value since their initial investment.

However, the potential sell pressure on bitcoin created by this event could be overblown, as many creditors are likely to retain their shares rather than sell.

Thorn's analysis suggests that the majority of individual creditors, many of whom are long-time Bitcoin enthusiasts and early adopters, are likely to retain their shares rather than sell.

Here's a breakdown of the potential sell pressure:

Mt. Gox, a failed bitcoin exchange, is finally returning assets to customers in July 2024, a decade after it was hacked. This news has caused the price of bitcoin to dip below $61,000.

The number of bitcoins being returned is uncertain and could range from 65,000 to 140,000, worth nearly $9 billion at the upper end. This sudden supply hitting the markets has investors worried about lower prices.

Broaden your view: Bitcoin on Exchanges

Some bitcoin holders are worried that the distribution could lead to an increase in selling pressure. This is because early investors receiving these assets may be tempted to sell part of their holdings due to the significant increase in value since their initial investment.

Here are the estimated number of bitcoins being returned:

The potential sell pressure on bitcoin created by this event could be overblown, as Mt. Gox creditors have had over 10 years to sell their claims.