JPMorgan: Mt. Gox incident will put pressure on cryptocurrency market, will recover in August
The defunct cryptocurrency exchange Mt. Gox will begin distributing bitcoin repayments to creditors next month. According to JPMorgan analysts, these creditors are expected to sell part of their bitcoin receipts, which may initially put pressure on the market, but it is expected to recover from August. Nikolaos Panigirtzoglou, an analyst at JPMorgan, said in a report on Wednesday that Gemini Earn creditors may have recently liquidated some of the crypto assets they received. They said: "Looking ahead, similar downside risks emerged in July with the repayment of Mt. Gox creditors." Last month, creditors of the Earn product of cryptocurrency exchange Gemini received $2.18 billion worth of digital assets. They received 97% of the crypto assets on May 29 and the remaining 3% on June 20. Analysts at JPMorgan noted that given the negative cryptocurrency price action since May 29, “it is reasonable to assume that some Gemini creditors, primarily retail customers, have at least partially taken profits in recent weeks, as the price of Bitcoin has more than tripled since the digital asset was suspended on November 16, 2022.” This assumption is supported by JPMorgan’s Bitcoin futures position indicator based on Chicago Mercantile Exchange (CME) futures, a slight decline in which suggests that it is mainly retail customers rather than institutional investors that have been selling crypto assets in recent weeks, the analysts added. Mt. Gox creditors will receive 142,000 bitcoins from July to October, worth about $9 billion at today’s prices. Despite the October deadline, JPMorgan analysts believe that most repayments will be concentrated in July. "Assuming that most of the cash out by Mt. Gox creditors occurred in July, this would cause further pressure on cryptocurrency prices in July, but then rebound from August," the analysts said.
