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Bitcoin could be in for a wild ride as Mt. Gox and the US government gear up to release $14 billion in Bitcoin, a move that could significantly disrupt the market with overwhelming selling pressure.
Bitcoin Braces for $14B Sell-Off from Mt. Gox and US Gov’t
Cointelegraph reports that the United States government and Mt. Gox have the potential to add about $15 billion worth of selling pressure to Bitcoin, which might cause its slow progress to continue into September.
More downward pressure on price could soon be seen as over $14.8 billion worth of Bitcoin floods the market.
In addition to the nearly $12.1 billion in Bitcoin held by the US government, the nearly $2.7 billion in Bitcoin due to be distributed by the now-defunct Mt. Gox crypto exchange is a further 46,000 Bitcoin.
Kaiko Sees Limited Impact from Mt. Gox’s $2.7B Bitcoin Disbursement
Kaiko, a crypto analytics firm, predicted on August 29 that the $2.7 billion that Mt. Gox is planning to disperse on Kraken before the end of 2024 will not have much of an effect on the market.
“Kraken has handled BTC ETF flows with just a minor increase in slippage at the US market close. Its liquidity profile suggests that any additional selling pressure from the Mt. Gox repayments is unlikely to cause structural issues that could affect the broader market.”
The $9.4 billion worth of Bitcoin that Mt. Gox creditors have been waiting for has risen in value by more than 8,500% in the past decade, so many investors will undoubtedly try to unload their holdings.
Mt. Gox Creditors Yet to Unload Their $9.4B Bitcoin Holdings
Mt. Gox debtors still haven't sold their Bitcoin, even though its value has risen significantly.
Nearly $4 billion worth of Bitcoin was paid out to creditors of Mt. Gox by the end of July, representing 41.5% of the payments owing to consumers.
A report from Glassnode dated July 29 states that the majority of Mt. Gox creditors chose not to sell.
“Creditors opted to receive BTC, rather than fiat, which was new in Japanese bankruptcy law […] As such, it is relatively likely that only a subset of these distributed coins will be truly sold onto the market.”
The spot cumulative volume delta (CVD) has not significantly increased on Karken following the Mt. Gox BTC distribution. CVD is a measure that assesses the net difference between spot buying and selling trading volume on centralized exchanges.
As a result of a monthly decline of more than 10.7 percent, the price of Bitcoin has remained muted below the $60,000 psychological level.
If Bitcoin wants to end August on a positive note, it needs to complete the month over $64,300.
Bitfinex researchers informed Cointelegraph that the summer's lack of liquidity would persist into September, making it tough for Bitcoin to break through the $63,900 barrier:
“Price is a reflection of historical market transactions; we must look under the hood. Price rallied up to the Short Term Holder (STH) realized price of around $63,900 currently, and thus, we also saw some profit-taking from the STH cohort.”
September Historically Challenging for Bitcoin Prices
The experts noted that Bitcoin's average returns for September since 2013 have been negative, coming in at -4.78%.
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