Bitcoin
Bitcoin Rebounds 5% as Analysts Argue Mt Gox Fears Are Overblown
Investors can breathe a sigh of relief as net inflows into US spot Bitcoin ETFs have exceeded net outflows worth US$31 million for the first time in two weeks, according to data analytics platform SoSovalue.
This new vote of confidence in Bitcoin by institutional investors coincided with the Bitcoin Price recovering from $59,495 to $61,485 at the time of writing, up 3.5% after Bitcoin broke through the $60,000 mark on June 25.
Fidelity’s FBTC fund saw the largest inflow US$49 millionwhile Bitwise’s BITB fund witnessed an influx of US$ 15 million. Meanwhile, Grayscale’s GBTC fund recorded the largest outflow of US$30 million.
Bitcoin ETFs saw a huge sell-off as net outflows were at US$714 million in the previous five trading sessions. The sell-off intensified on June 24, when Mt. Gox trustees announced that the creditors of Monte. Gox would start receiving refunds starting next week.
Another factor in the rise in Bitcoin’s price is the likely liquidation of derivatives. Almost US$62 million amounts in short positions were liquidated, which represented the vast majority of total liquidations that occurred in the last 24 hours.
A note from the Off the Chain Capital trading desk shared with Decrypt suggests that the creditors of Mt. Gox, who will begin receiving refunds starting next week, may not be too keen on parting ways with their decade-old holdings.
“After Mt. Gox distributions are made, I believe the market will generally not begin dumping the assets immediately because I do not see as many credit holders selling their Bitcoins once received as might have happened if they had received them several years ago. ”Brian Dixon, CEO of Off the Chain Capital, wrote in the note.
The reason, he added, is that Bitcoin has matured considerably since Mt. Gox filed for bankruptcy in 2014.
“The claim holder should ask themselves if they need this money for anything or if they are better off holding Bitcoin as a long-term store of value,” Dixon wrote, adding that BTC has been the best-performing asset in 12 of the last 15 years.
The sentiment was shared by Alex Thorn, head of research at Galaxy Research.
“Creditors have been stuck in Mt. Gox bankruptcy for over 10 years – finally administrator says in-kind distribution of #BTC #BCH will begin in July. We believe that fewer coins will be distributed than people think and that this will cause less #bitcoin selling pressure than the market expects,” Thorn tweeted.
In a follow-up tweet, Thorn stated that individual creditors are unlikely to sell their earnings as they are long-term holders and noted that they have had the option to sell their claims for nearly a decade. He added that the sale of recovered BTC would also incur significant capital gains tax for US creditors, as Bitcoin has soared substantially over the past decade.
Edited by Stacy Elliott.