Bitcoin
What’s Next for Bitcoin (BTC) Price After Mt. Gox News
Bitcoin (BTC) is sharply slashing cryptocurrency prices on Monday after the administrator of defunct cryptocurrency exchange Mt. Gox said it will begin returning more than 140,000 BTC in July to customers whose assets were stolen in a 2014 hack.
At press time, bitcoin was trading at $60,700, down more than 5% in the past 24 hours and at its weakest level since early May. Ether (ETH) was lower by a similar amount than the broader situation CoinDesk 20 Index.
Those selling today are contemplating the effect of more than 140,000 bitcoins hitting the market in less than a month. Putting that number into perspective, it would be slightly less than the immediate liquidation of Fidelity’s spot bitcoin ETF, which at last check contained 167,375 bitcoins.
“We believe that fewer coins will be distributed than people think and that this will cause less bitcoin selling pressure than the market expects,” said Alex Thornhead of research at Galaxy.
Thorn said his research suggests 75% of lenders will accept “early” payment in July, meaning a distribution of around 95,000 coins. Of that total, Thorn believes 65,000 coins will go to individual lenders, but he thinks they may be more “diamond-handed” than most expect. Among the reasons, he said, is that they have already weathered years of “compelling and aggressive claims fund offers,” not to mention the capital gains taxes involved, as bitcoin has risen 140-fold since the bankruptcy.
Turning to these claims funds, having discussed with a few, Thorn suggests that the overwhelming majority of partners in these funds are high net worth bitcoiners looking to build their stack at a discount, as opposed to arbs looking for quick and profitable trading.