Mt. Gox activates wallet ahead of schedule to pay $9 billion in Bitcoin and BCH, what's next?

Highlights

Mt. Gox is expected to begin repayments of BTC and BCH soon.

Before repaying the money, Mt. Gox cold wallets transferred some BTC to other addresses.

As the German government liquidates BTC, the $9 billion Mt. Gox incident has led to increased market panic.

What's next for BTC prices?

The amount that Mt. Gox is about to repay is as high as $9 billion, which is about 0.7% of the 19.7 million BTC currently in circulation. Given that the price of BTC was about $600 when Mt. Gox collapsed, this huge debt has heightened concerns that creditors are eager to sell Bitcoin for profit. Now, creditors are expected to receive nearly 100 times their initial investment.

James Butterfill, head of research at CoinShares, expressed concerns about the impact of this large BTC issuance on the market. “With the news that the trust will begin selling in July, investors are understandably concerned,” he said, according to CNBC. In addition, Butterfill stressed that this BTC reserve issuance has long been a concern for bullish BTC investors.

Similarly, JPMorgan analysts have also assessed the potential impact of Mt. Gox creditors liquidating their holdings. They predict that this sell-off could put short-term pressure on BTC prices. “Assuming that the majority of liquidations by Mt. Gox creditors occur in July, this would create a trajectory where cryptocurrency prices face further pressure in July but rebound from August,” JPMorgan analysts said in a recent research note.

In addition, with the German government selling and Mt. Gox expected to pay, BTC long liquidations reached $77.67 million. This suggests that BTC will accelerate its collapse. In addition, it is worth noting that when Mt. Gox collapsed in 2014, BTC was worth only $600, and creditors made 100 times the profit. Therefore, they can realize these profits immediately after payment, which may lead to a significant correction in the price of BTC.