CoinShares analysts believe that concerns over the impact of Mt. Gox on the cryptocurrency market may be exaggerated.
Mt. Gox, once the largest exchange for Bitcoin, went bankrupt after significant hacking attacks from 2011 to 2014. The exchange has since recovered many lost tokens and is in the process of repaying creditors. The lengthy bankruptcy process is a source of uncertainty due to potential selling pressure.
In its latest report, CoinShares indicates that many creditors of Mt. Gox may opt to hold on to the majority of the recovered tokens to minimize tax liabilities. They believe that when selling occurs, it may be distributed across various cryptocurrency exchanges, providing buyers with enough liquidity to absorb the selling pressure.
The report emphasizes that creditors are expected to receive approximately 15% of their original BTC holdings, which represents a staggering 13,600% increase considering the significant rise in Bitcoin prices since the stock market crash.
If creditors decide to sell immediately, the substantial gains could result in significant tax events. Therefore, many creditors may choose to sell only a small portion of their holdings or temporarily hold onto their tokens.
CoinShares also points out that creditors have had numerous opportunities over the past 12 years to sell their claims for USD, but most have chosen not to do so, indicating that many creditors may be unwilling to sell immediately upon receiving Bitcoin.
Furthermore, the distribution will take place at different times across multiple exchanges (Bitstamp, Kraken, Bitbank, BitGo, SBI VC Trade, etc.), which should reduce the likelihood of simultaneous large-scale selling events.