Investors Express Concern as Mt.Gox Plans to Unleash $9 Billion Worth of Bitcoin: Is Their Worry Justified?
The imminent release of $9 billion worth of Bitcoin from the defunct exchange Mt. Gox has caused a stir among cryptocurrency investors. Concerns about the potential impact on Bitcoin prices have been raised. However, it is important to analyze the situation and determine if the panic is justified.
After experiencing a remarkable recovery earlier this week, the price of Bitcoin has suffered a setback. The reason behind this is that the Japanese trustee of Mt. Gox, Nobuaki Kobayashi, has begun moving tokens in wallets. In a note dated May 28, Kobayashi mentioned plans to distribute Bitcoin and Bitcoin Cash to creditors in the near future.
It is expected that most claimants will receive their tokens by the end of October. This has made investors anxious, as they fear a significant consolidation. The trustee holds over 140,000 Bitcoin and a similar amount of Bitcoin Cash.
According to Bloomberg analysts, approximately 75% of these tokens will be paid out to creditors who opted for early reimbursement with a small discount this year. This means that nearly 95,000 Bitcoins will enter the market this year. The remaining creditors will receive their full payout over the course of a few years.
However, prominent creditors and long-time players in the market do not anticipate a lasting negative impact on Bitcoin prices. They believe that the recent approval of US exchange-traded funds will absorb the influx of tokens. Many of these seasoned investors plan to hold onto their coins or gradually sell them, as they are betting on a continued increase in price.
Adam Back, the CEO of Blockstream Corp., is one such creditor who intends to keep any distributed Bitcoin. Back argues that selling at the beginning of a bull market is illogical. If one has already waited a decade, what’s another year or so? While some individuals may require liquidity, this is likely a small group. Most people have moved on or accepted their losses years ago.
The Bitcoin market has significantly matured since the collapse of Mt. Gox. Claim holders must consider whether they need the money immediately or if it is better to hold onto Bitcoin as a long-term store of value, given its exceptional performance over the past 15 years.