Analysts say Bitcoin will not be deterred from Gox Mountain and German sales

Amid the German government's move to market makers and exchanges, market participants are scrambling to sell bitcoin on the heels of the recent MitGox lenders.

Yet analysts and experts Decrypt Looking at the increase in sales by these entities, he said, concerns are overblown as the market will continue to hold up.

“It would be unwise to underestimate the potential of the Bitcoin market to attract significant selling pressure from the likes of Matt Gox and Germany,” said Jeff Yew, CEO of crypto asset manager Monochrome. Decrypt.

Yew likened the situation to the “BearWhale” incident on October 6, 2014. During that event, an anonymous trader placed a massive sell order of 30,000 BTC at an average price of $300 on the Bitstamp exchange. Many expected the “wall of sales” to drive down the price of Bitcoin.

But to the surprise of analysts at the time, the market quickly caught the sell order, causing bitcoin's price to stabilize and eventually recover, Yew said.

Yew's comments follow the German government's Bitcoin liquidation effort announced this week 900 million dollars The price of the property on Monday. We met with more 362 million dollars Bitcoin price is moving to Kraken and crypto trading desks on Tuesday.

which has It continued until ThursdayGermany is moving more than $2 billion to trade and market makers in the last week alone. It is worth noting that the German transfers do not sell the seized bitcoins, but it does highlight the desire to liquidate them.

said Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital. Decrypt German holdings will not have enough selling pressure to disrupt the market.

with some 438 million dollars McMillin, who has rallied in US Bitcoin exchange-traded funds (ETFs) in recent days, said the worst of the German disruption appears to be fading.

“The German government's sell-off has overcome a lot of fear, uncertainty and uncertainty, with 60% of their holdings sold in the last week or so,” he said.

At the end of last month, Germany had $2.8 billion worth of bitcoins in its wallet. It fell below that 1 billion dollarsAccording to the chain Data From Arkham Intelligence.

M. Gox

Mt.Gox is a bit more complicated, with nearly $9 billion in bitcoin lost from the exchange's liquidation to creditors, McMillin said. The first third is in motion and will be returned to creditors in the next 60 days, he said.

There are approximately 127,000 creditors in the Matt Gox recovery process. Those lenders in 2010 Following the collapse of the former Japanese exchange in 2014, they have been waiting for compensation for ten years due to the hacking that resulted in a loss of 850,000 BTC.

“We estimate another two-thirds will happen in the chain in the second half of this year, so we're looking at about $1.5 billion a month in sales pressure,” he said.

However, it is “highly unlikely” that lenders will sell to the market at once. Since at least 2014, exposure to Bitcoin has included Mt. Gox lenders have seen the value of bitcoin rise even with the various problems, possibly increasing their confidence in its value today compared to 10 years ago, McMillin said.

They also have to contend with capital gains tax implications, including long-term and short-term gains and the sharp rise in Bitcoin prices since 2014.

Strategic planning to minimize financial impact by selling gradually and navigating complex financial laws and regulations to ensure compliance should also be considered, analysts said.

McMillin added: “The worst-case scenario is probably 50% of Mt Gox's lenders sell, or about $200 million a week, which is not much when ETFs are net buyers, and finally we have this big fear, uncertainty.” , and doubts are encouraging behind us.”

Pav Hundal, chief market analyst at crypto exchange Swyftx, agreed, he said Decrypt Matt Gox and Germany are unlikely to move the needle much.

“The forces pushing Bitcoin right now are mostly macro,” Hundal said. “The risk of Bitcoin breaking below $50,000 from sell-side pressure looks less and less plausible with each passing day.”

Even if the German government “fat-fingered” the transfer and accidentally dumped the rest of the bitcoin on the market, it would account for a small fraction of recent daily trading volumes, he added.

Edited by Andrew Hayward.