#MtGox Sword of Damocles conjecture!
Previously sold in Germany
Now the MtGox compensation issue has been put on the agenda, and preliminary tests were conducted today. Although the short-term decline of Bitcoin is not related to it, it is still considered to be negative in terms of sentiment. The compensation of MtGox is basically based on currency, which is the free buying and selling of the debtor, so we can't use a series of data to judge whether it will be sold, how much is sold every day, etc., so I think we can consider some issues from the perspective of the debtor and make some appropriate guesses!
1. The cost is 400U, and the current profit multiple is extremely high. The debtor will inevitably consider whether to cash out part or all of the assets after receiving them.
2. Most of the debtors purchased BTC between 2011 and 2014. At that time, those who had access to BTC and had a forward-looking vision to purchase and store OG were basically middle- and high-net-worth people, and had good investment vision and risk spirit. After all, at that time, investment was not an area that many ordinary people could get involved in. Therefore, after receiving compensation, the middle- and high-net-worth people of that year do not know whether they can still maintain their assets now, but most of them should not be too bad, so the large-scale sell-off we are worried about may become a small-scale sell-off. After all, the middle- and high-net-worth people have a longer-term expectation for the time period of investment and the future returns of investment products.
3. The future of BTC. At present, whether it is ETF or the future US president's support for encryption, BTC itself seems to have better potential, and the holding cost is $400, which means that even if you leave it alone, the possibility of falling to the cost is only less than 1%-5%. Of course, if you must bet on the possibility of BTC returning to zero, there is no way. Therefore, for OG with a lower holding cost, as long as they continue to invest, they may choose to continue holding, even if they cash out, they will probably choose to maximize their profits in a higher market environment.
4. For ordinary retail investors, if they get compensation, they will most likely sell all of their bitcoins and cash out, and may only keep a small portion. This is understandable, but these people pay more attention to the current profit, that is, maximizing the current profit. If you get 100 bitcoins as compensation, will you choose to sell them directly at the current price without thinking? Or choose to wait for the price to rise, or place an order to sell? I think most people will probably choose the latter, unless they are in a hurry to use funds to save their lives, they will choose to sell directly.
5. For people with middle and high net worth, the means and methods of selling BTC are not too single. It is very likely that they will not only sell through exchanges and primary and secondary markets, but also through OTC and other methods. More trading methods may be destined not to be sold in a concentrated manner.
6. If you are an OG holding 100 BTC, you want to cash out after you get the compensation, because you have made a profit of more than 160 times. However, you have to consider a question: how to invest your money after you cash out? Put it in the bank? Since you can choose to invest, you probably won’t choose the bank option. Invest in other trading markets? The US stock market is currently at a high level, so you dare not buy too much. The volatility of US bonds has been high recently, and the yield has declined. Although it can guarantee stability, you have to consider the annualized return. Invest in the real economy? The global economy is in a state of high tension, and you probably don’t dare to invest in the real economy even if you are given the opportunity. So, do you have a better choice?
Although MtGox is currently another sword of Damocles after Germany, and it will indeed bring a certain degree of pessimism to the market, the pessimism of MtGox is different from that of Germany. There will be greater imagination and possibilities in between, so I don’t think there is any need to be overly pessimistic and fearful.
At the same time, for traders, if you are doing contracts, you are worried about being smashed if you go long, and you are worried about not being able to smash if you go short, so it is better not to do it first, just wait for the end of the compensation phase and maintain a cool-off period, so that you can open more of this unpredictable volatility. As for spot traders, the price has risen in the past few days, and many people are shouting that they missed the opportunity and are anxious. If MtGox really sells this time, it will be a good thing for you, giving you a chance to get on board.
So looking at it from another angle, things are not that pessimistic!
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