Today, the Mentougou incident has become the focus of our discussion, especially because people are worried about the possible sell-off after a large amount of BTC flows into the hands of retail investors, which will cause a new round of downward pressure on the market. For this concern, we first need to understand that according to the latest notice, Mentougou's BTC and BCH repayment plan is ready and will be gradually implemented from July 2024.
According to the data, the total amount of BTC held by Mentougou is 141,686. Although this is a considerable number, given that the repayment process will be carried out gradually, we can speculate that this process will not be completed in a short time. Even if it is assumed that all BTC are sold in the shortest time, its direct impact on the market will be controllable. What's more, such an assumption is unlikely to hold true in reality, because not all retail investors who obtain BTC will choose to sell immediately.
From my personal point of view, the direct market impact of the Mentougou incident is actually quite limited. Compared with the previous bankruptcy incidents of institutions such as FTX and Genesis, although the amount of BTC in Mentougou is huge, the pressure on the market will be greatly diluted due to the gradual nature of its repayment process. In addition, we also need to take into account the overall sentiment and liquidity of the current market. Although the current market sentiment is relatively low and liquidity is relatively poor, the market's reaction will depend more on future macroeconomic data and policy trends.
Therefore, I think the concerns about the Mentougou incident are a bit excessive. We should pay more attention to the upcoming release of important economic data, such as PCE on Friday, non-agricultural data next Friday, and CPI in the middle of the month. These data will directly affect the market sentiment and capital flow, thereby regulating the possible market impact of the Mentougou incident. If these data perform well, the negative impact of the Mentougou incident on the market will be further reduced. On the contrary, if the data performs poorly, the impact of the Mentougou incident may be amplified. But in any case, from the current situation, we have reason to believe that the market is capable of meeting this challenge.
