The research head at Galaxy, a crypto financial services firm, is addressing concerns that the Mt.Gox repayments could lead to a Bitcoin collapse.
In a recent interview on the Unchained Podcast YouTube channel, Alex Thorn explained that Mt.Gox is set to repay creditors with about 142,000 BTC, valued at nearly $9 billion, starting in July through October.
Reports of Mt.Gox’s upcoming BTC distribution caused a stir in the crypto markets, resulting in over $313 million in liquidations last week.
Thorn believes that the worries surrounding Mt.Gox are exaggerated, as his research suggests that less than half of the coins will be available for sale upon issuance. He also predicts that recipients will likely hold onto their BTC instead of selling immediately.
According to Thorn, individuals receiving BTC in the next few months have agreed to a 10% to 11% discount to participate in Mt.Gox’s early payout program. He estimates that 75% of creditors accepted the offer, reducing the number of BTC for distribution to 94,600 coins.
Thorn also mentioned that many people sold their bankruptcy claims to funds at a discount, with around 20,000 of the Bitcoin held by these funds. This leaves approximately 74,000 coins available for distribution.
Thorn believes that the funds purchasing the bankruptcy claims are unlikely to sell in large quantities, as the entities providing liquidity to buy the claims intend to hold onto the coins once released.
Additionally, Thorn mentioned that the last group set to receive BTC from Mt.Gox is the crypto exchange Bitcoinica, which is expected to receive 10,000 BTC. However, Bitcoinica cannot sell the Bitcoin immediately due to its bankruptcy process in New Zealand.
In conclusion, Thorn estimates that 64,000 BTC will be distributed to creditors’ trading accounts. He believes these entities, being early Bitcoin adopters, are more inclined to hold onto their assets rather than sell them immediately.
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