Galaxy Research Director Alex Thorn believes that the distribution of over 140,000 Bitcoin (BTC) from the Mt. Gox bankruptcy will have a less severe market impact than anticipated.

Thorn said his research indicates that Bitcoin sales will come mainly from individual creditors, who will receive less than half of the 140,000 Bitcoins. He also argued that most individual creditors have been involved in Bitcoin since the early days and are unlikely to sell.

Theo Thorn:

“Creditors tend to favor long-term Bitcoin holders. They are tech-savvy pioneers… [who have] resisted for years aggressive and attractive offers from claim funds, indicating they would rather have their coins back than a payout payment in USD.”

Bitcoin led a broad decline in cryptocurrency prices on Monday after the fiduciary of exchange Mt. Gox bankruptcy announced plans to begin returning more than 140,000 BTC to customers from July. These assets were stolen in a famous hack in 2014.

As of press time, the leading cryptocurrency is trading at more than $59,000, down more than 7.5% in the past 24 hours, marking its lowest level since early May. Ethereum (ETH) and altcoin markets also experienced similar price declines.

Concerns about Mt. Gox

The bearish market has been spooked by concerns about the impact of a massive influx of Bitcoin into the market in less than a month. To put things into perspective, the expected distribution of 140,000 BTC is just less than the total holdings of Fidelity's Bitcoin spot ETF, which currently holds 167,375 BTC.

However, Thorn believes that fears are overblown as individual creditors — expected to sell — only received 65,000 BTC instead of 140,000 Bitcoin.

He wrote:

“We think fewer coins will be distributed than people think and it will cause less bitcoin selling pressure than the market expected.”

Thorn research shows that about 75% of creditors will choose to pay early in July, resulting in a distribution of about 95,000 BTC. Of those, Thorn estimates that 65,000 Bitcoin will go to individual creditors, who he believes are more likely to keep their BTC rather than sell it immediately.

Thorn points out that creditors' history of aggressively resisting proposals from claims funds and the significant capital gains tax they will face as Bitcoin has increased in price 140 times since bankruptcy in 2014 .

Meanwhile, his discussions with the claiming funds indicate that most of the partners in these funds are high net worth individuals who see this as an opportunity to buy Bitcoin at discount prices instead of those looking for quick profits.

Despite the potential mitigating factors, Thorn admitted that even if only 10% of the 65,000 coins allocated to individual creditors were sold, it would still result in 6,500 BTC entering the market, potentially possible in market sales — this could still have a significant impact on prices in the short term.

Bitcoin Cash will be hit harder

Thorn added that Bitcoin Cash (BCH) is expected to struggle more than Bitcoin. BCH recovered from Mt. Gox used its BTC keys to receive the fork, which occurred years after its bankruptcy.

Given BCH's low liquidity and the fact that no creditors bought it initially, creditors will likely sell the majority of it.

Thorn said BCH distribution could have a more pronounced impact on its price due to these factors. With fewer buyers in the market and a higher likelihood of selling, BCH could experience significant downward pressure.

Source: https://tapchibitcoin.io/nha-phan-tich-du-doan-tac-dong-han-che-tu-viec-phan-phoi-bitcoin-cua-mt-gox-trong-boi-canh- thi-truong-truot-doc.html