Analysts from CoinShares suggest that concerns over the repayment of debts owed by the defunct cryptocurrency exchange Mt. Gox may be exaggerated.
Once the largest Bitcoin exchange globally, Mt. Gox declared bankruptcy abruptly, losing a substantial amount of its holdings to theft.
Despite these setbacks, the exchange managed to recover a significant portion of its assets and has since been engaged in a protracted process to reimburse former customers. This restitution process has created considerable uncertainty within the market, primarily due to the potential flood of Bitcoin sales should Mt. Gox liquidate its holdings to settle debts.
In a recent analysis, CoinShares indicates that many Mt. Gox creditors are likely to hold onto the majority of their Bitcoin holdings to minimize tax liabilities. When sales do occur, they foresee these being spread across various cryptocurrency exchanges, thereby allowing sufficient liquidity to absorb any selling pressure.
“Considering that creditors are expected to receive approximately 15% of their original Bitcoin holdings, and given Bitcoin’s significant appreciation since the time of Mt. Gox’s collapse—an increase of approximately 13,600%—selling immediately could trigger substantial tax implications. Hence, it’s probable that many creditors will opt to sell only a fraction of their holdings or retain them for the foreseeable future.”
The analysis further supports this by noting that creditors have received numerous offers over the past twelve years to purchase their claims for USD, yet many have chosen not to pursue these options. This suggests a preference among creditors to hold onto their Bitcoin holdings rather than convert them to fiat currency.
CoinShares emphasizes that while concerns about potential sell-offs exist, the actual impact may not be as severe as feared.
As of the latest update, Bitcoin is trading at $60,146.
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