Mt.Gox: Bitcoin selling pressure only half as wild?

Mt.Gox, the infamous exchange that filed for bankruptcy in 2014, plans to pay out nearly US$9 billion in Bitcoin to its claimants starting in July. This news did not only cause joy in the crypto space.

Investors fear a huge sell-off of Bitcoin. After all, the cryptocurrency's value has risen more than 100 times since the incident, so the pressure to sell seems correspondingly high. However, there could be fewer BTC entering the market than initially believed. At least that's what Alex Thorn, head of research at Galaxy Digital, says about the X.

According to his analysis, 95,000 of the 141,000 BTC initially recovered could be paid out. Of this, 20,000 went to compensation funds and 10,000 to Bitcoinica BK, a crypto CFD platform. That leaves "only" 65,000 BTC, which is likely to go to private investors, according to Thorn's estimate.

"There are also reasons to believe that these investors could turn out to be larger 'diamond hands' than originally assumed," Thorn says. On the one hand, many of the Mt.Gox victims encountered Bitcoin at a very early stage, suggesting that they see themselves more as long-term investors.

Second, Mt.Gox investors had resisted payout offers from claims funds for years, which also supports the claim that they preferred to get their Bitcoin back rather than a USD payout. Moreover, in conversations with Thorn, these payout funds emphasized that they wanted to keep Bitcoin.

And finally, there are also tax reasons for investors not to sell right away.