- Mt. Gox victims will start receiving their payouts this year
- Some crypto investors have been worried for years that a Mt. Gox payout will lead to a market crash
- These fears are probably overblown for several reasons
Ever since it was known that Mt. Gox victims would be sharing a payout of hundreds of thousands of bitcoin at some point in the future, there have been worries over them killing the Bitcoin market as a result through a mass liquidation. The first payouts are now closer than ever, potentiallly next month, but here are several reasons why concerns over a Mt. Gox-inspired payout are overblown.
Big Sellers Will Sell OTC
Anyone receiving a bitcoin handout that could crash the market isn’t going to run to Binance and market sell, because they will only end up getting a worse price for themselves if they do. They are much more likely to go to an OTC counter and sell off-book in order to avoid this. There are plenty of places to do this now, even through big exchanges, and these people wil be savvy enough to know to avoid a huge market sell.
Many Recipients Will Hold
There seems to be a belief that all Mt. Gox holders are just waiting to get their bitcoin back so they can liquidate immediately. These people were buying back in 2011-2014 – they are OGs. Many might have bought for fun and will sell, but they won’t have been big holders. A large number will have believed in Bitcoin as a long term investment and will treat it as such, seeing how much the value has increased since the hack.
It’s a Bear Market, Baby
Had the first payouts ocured when Bitcoin was flying high at $65,000 or $69,000 last year, there might be an agrument that recipients would be aeager to sell. However, Bitcoin is in the grips of a bear market, one that could go on for some time, and many of the people that were around in the Mt. Gox days are wise enough to know that you don’t sell at the bottom of a bear market.
The Stars Need to Align
For there to be a mass market crash, there needs to be a huge coordinated dump. We don’t know how many people are going to choose the option of the early lump sum, and how much of the payout will come in BTC as opposed to BCH and cash, but this will need to be a pretty hefty amount to damage the order book significnantly. In order to precipitate a market collapse, a large number of recipients will need to market sell at roughly the same time, or shortly after each other, which is both almost impossible to organise and counter productive.
Don’t Worry – HODL Your Bitcoin
As we can see, there are very good reasons why a Bitcoin selloff as a result of the Mt. Gox payouts won’t happen, so don’t be frightened out of your holdings when the time comes.