Finance analyst Jacob King warns of potential Bitcoin price pressure. He predicts most Mt. Gox creditors will sell their repaid Bitcoin.
King estimates $8.2 billion in additional selling pressure. On-chain movements suggest creditors have already begun selling.
"No Bitcoiner will say this out loud, but the majority of the $8.2 Billion in $BTC that is set to be distributed back to ex-clients are going to be sold off," King stated on July 4.
Mt. Gox announced the commencement of Bitcoin and Bitcoin Cash repayments on July 5. This news raises concerns about Bitcoin's price stability.
Bitcoin has struggled recently. It traded above $60,000 but fell 18% in Q2 2024. King predicts further decline.
"I understand this is controversial, but based on the current low demand volume, this will easily send BTC back into a harsh bear market," he said.
Bitcoin's price dropped 3.9% to $55,250 in 24 hours as of 10:17 am UTC on July 5. It's down over 10% week-on-week.
Despite market concerns, the repayments are positive for creditors. Mark Karpelès, former Mt. Gox CEO, expressed relief on social media.
"Mt. Gox customers have finally started receiving Bitcoins! After over 10 years I wasn't sure anymore if it'd finally happen, but here we are finally!!" Karpelès wrote.
Approximately 127,000 Mt. Gox creditors are owed $9.4 billion. Bitcoin's 8,500% price increase over the past decade may incentivize profit-taking.
King expects 99% of creditors to sell. "Imagine billions worth of Bitcoin all being dumped gradually over the next several weeks. There is no way to spin this to be bullish," he concluded.