Mt. Gox Bitcoin Repayments to Pressure Market in July, Recovery Expected by August

Next month, creditors of the defunct crypto exchange Mt. Gox will start receiving bitcoin repayments, which analysts at JPMorgan believe could initially put pressure on the market. However, they anticipate a recovery beginning in August.

According to JPMorgan, creditors of Gemini Earn recently liquidated some of their crypto assets, which led to negative crypto price action. Mt. Gox creditors face a similar risk in July when they will receive 142,000 bitcoins, valued at around $9 billion. The analysts suggest that if most liquidations occur in July, the market could experience downward pressure, but a rebound is expected from August onwards.

Gemini Earn creditors were given $2.18 billion of their digital assets recently, with 97% received on May 29 and the rest on June 20. JPMorgan analysts observed that many retail customers likely took partial profits, as evidenced by the slight decrease in bitcoin futures positions on the CME.

FTX, another bankrupt crypto exchange, will distribute $14 billion-$16 billion in cash repayments later this year. Unlike in-kind repayments, these cash repayments could positively impact the crypto market, as creditors might reinvest in crypto assets. JPMorgan notes that there will be a three-month gap between the potential Mt. Gox liquidations in July and the FTX reinvestments expected in October/November, posing a challenge for the crypto markets.

Despite the initial pressure from Mt. Gox repayments, the anticipated reinvestment of FTX funds later in the year could bolster the market, creating an optimistic outlook for the months ahead.