As July approaches, there is hope for users of the now-defunct Mt. Gox exchange to finally receive restitution after a decade of waiting. However, market players are feeling uneasy about the upcoming distributions, fearing potential sell-offs. Bitcoin has been on a downward trend since the start of June, struggling to gain significant upward momentum despite some inflows from ETFs.
On July 3rd, the price of Bitcoin briefly fell below $60,000 before seeing a minor rebound. The following day, the price took a more substantial hit. Recent data indicates that Bitcoin may experience a “subdued” third quarter, mainly due to the uncertainty surrounding the distribution of funds from Mt. Gox.
According to QCP Capital, Bitcoin’s price is expected to remain relatively stable in the current climate. Despite a surge in the US equity market following comments from Federal Reserve Chair Jerome Powell, Bitcoin and Ethereum have not seen much improvement in their prices. Both cryptocurrencies continue to hover around $57,000 and $3,000, respectively.
The options market has shown a strong bias towards an upside movement, suggesting that market participants anticipate a year-end rally. The buying interest in longer-term options at strike prices of 100k and 120k is evidence of this sentiment. However, QCP Capital believes that Bitcoin’s performance in the third quarter will be subdued due to the uncertainty surrounding Mt. Gox’s impending fund release.
Mt. Gox lost 850,000 Bitcoins in investor funds back in 2014, totaling $9.4 billion owed to approximately 127,000 creditors. The creditors have been waiting patiently for over a decade to recover their lost funds following the collapse of the exchange due to undetected hacks. The announcement of the distribution process beginning in early July has brought relief to affected users, although it has raised concerns about potential selling pressure in the market.
The anticipation of restitution from Mt. Gox has brought both hope and fear to the cryptocurrency market. While users eagerly await the recovery of their lost funds, the uncertainty surrounding the impact of the funds’ release on Bitcoin’s price has led to a cautious atmosphere among market participants. As we move into July, all eyes will be on Bitcoin’s performance and how it navigates through this challenging period.
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