The commencement of the Mt Gox Repayment process this week has caused significant turbulence in the Bitcoin market. Despite the uncertainty, analysts maintain that Bitcoin is a viable long-term investment option in the face of weakening fiat currencies.
The long-awaited Mt Gox repayments, which began recently, have generated mixed opinions among cryptocurrency enthusiasts due to their significant impact on the price of BTC. While initial fears of a massive sell-off by Bitcoin investors are diminishing, skepticism still pervades the crypto market.
Reflecting on the past, the collapse of the crypto exchange in 2014 resulted in a substantial loss of 150,000 BTC. Since then, the rehabilitation process has been arduous, filled with extensive deliberations. Finally, the repayment process has commenced, although the timing varies.
According to a recent document from the trustee, Mt. Gox creditors can expect to receive their Bitcoin (BTC) or Bitcoin Cash (BCH) repayments within a period of 14 to 90 days, depending on the chosen crypto exchange. For instance, Kraken will take up to three months to process payouts, while Bitbank and SBI VC Trade will complete them within two weeks.
The purpose of this significant payout schedule for Bitcoin and Bitcoin Cash is to mitigate the fear of a major sell-off, which has gripped crypto investors. However, the total amount being distributed, estimated to be around 2.71 billion USD worth of BTC, is substantial enough to cause market jitters.
At the time of writing, BTC is being traded at $56,874.25, marking a 7.72% decrease in price over the past week. Following the news of Mt Gox, Bitcoin experienced a slight downturn, with its price hovering just below the $54,000 level. This prompted investors to liquidate their assets, resulting in a total value exceeding $665 million across exchanges. This event mirrored the volatility witnessed during the FTX collapse.
However, the price has since rebounded above the crucial support level of $56,000, indicating that the initial fears among investors have started to fade. Additionally, the fear and greed index, a significant sentiment indicator, also reflected this anxiety, dropping from a neutral 44 to a fearful 29 within 24 hours.
Despite the temporary turbulence, some analysts remain optimistic about Bitcoin’s long-term price trajectory. As previously reported, Chris Wood, Chief Strategist at Jefferies Investment Bank, emphasized the potential advantages for Bitcoin amidst the weakening of the US dollar.
Wood suggested that investors should view Bitcoin as a long-term hedge against the devaluation of traditional currencies rather than a short-term speculative asset. This perspective aligns with the growing acceptance of Bitcoin as a mainstream investment vehicle.
According to Wood, the inclusion of Bitcoin in investment portfolios is justified because it provides a legitimate alternative for risk-averse capital seeking a store of value, given the evidence accumulated over the past two decades of currency debasement in the G7 world.
In conclusion, the Mt Gox repayment plan has injected uncertainty into the crypto market. While the initial fears of a sell-off are subsiding, the staggered payout schedule and ongoing volatility indicate continued risks for investors.