Galaxy’s research director attempted to downplay concerns that the long-awaited payment from Mt. Gox could trigger a Bitcoin (BTC) crash.
In a recent interview, Alex Thorn stated that the now-defunct cryptocurrency exchange Mt. Gox must repay its creditors approximately 142,000 BTC, worth nearly $9 billion, from July to October.
Last week, news of the impending payout of owed Bitcoin (BTC) tokens from Mt. Gox caused shockwaves in the cryptocurrency markets, leading to liquidation of over $313 million. However, Thorn believes that concerns about the Mt. Gox situation may be exaggerated.
His analysis suggests that only a small portion of the total distributed BTC will likely be sold on the open market. He believes that less than half of the 150,000 BTC will actually be available for sale. Thorn explained that some creditors have accepted a 10% to 11% reduction for early repayment, reducing the total number to 94,600 coins.
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Thorn further explained that many creditors have previously sold their claims to funds at a discount, estimating that these funds currently hold around 20,000 BTC.
Considering that they are managed by investors who want to hold long-term positions in Bitcoin, Thorn believes that the total number of available BTC for sale will decrease to around 74,000 coins.
Additionally, he stated that 10,000 BTC will be received from the cryptocurrency exchange Bitcoinica, which cannot immediately sell them due to the ongoing insolvency proceedings in New Zealand.
Overall, Thorn predicts that only about 64,000 BTC will actually be in the hands of traders and assumes that most of these recipients are early Bitcoin investors who are more likely to hold onto their tokens rather than sell them. Finally, he concluded that the potential for significant market impact from the Mt. Gox payout will be smaller than expected.
