- Mt. Gox victims will receive their payouts next year
- Some crypto investors have been worried for years that a Mt. Gox payout will lead to a market crash
- We believe these fears are overblown and offer three reasons why
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. We don’t share that sentiment however, and here are three reasons why.
Big Sellers Will Sell OTC
Anyone receiving a huge Bitcoin handout who is really desperate to sell isn’t going to run to Binance and market sell, because they will only end up getting a worse price for themselves. They are much more likely to go to an OTC counter and sell off-book to as to not crash the market. These people still probably care about Bitcoin, so they won’t want to damage it.
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.
A Big Sell Won’t Change Market Sentiment
Even if many large holders did sell right at the same time, any dump won’t have a permanent effect on the market. If Bitcoin is in a bear market by the time Mt. Gox holders get their bitcoin then it will continue to be in a bear market when they sell, and likewise in a bull market. The market will absorb whatever happens and will carry on its merry way.
It may even be that the potential for a dump is priced in by the time the bitcoin is handed back.
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.