Not only BTC, "ghost" Mt. Gox also affected BCH

According to analysts, the exchange of Mt. Gox debt repayment of more than 9 billion USD BTC, BCH and Japanese yen will affect the price of BCH more than the price of BTC.

The "ghost" covering the cryptocurrency market in July this year is the representative of the Mt. Gox, which holds $9 billion in Bitcoin, will begin the process of returning assets to customers, ending a 10-year wait.
Potential selling pressure from Mt. Gox was one of the main reasons that pushed the BTC price dump to 57,800 USD on the morning of July 4.

For Mt. Gox at noon on July 4 performed a number of small value money transfer transactions to the outside world. This is the first transfer out of Mt. Gox since the wallet flip in early June, circulating all $9 billion in Bitcoin.

But according to some analysts, the return of Mt. Gox will impact the price of Bitcoin Cash (BCH) more than BTC, implying that investors should not be too pessimistic with Bitcoin prices.

MT. Gox will refund customers 142,00 BTC and 143,000 BCH this time. Although this amount of BTC is worth up to 9 billion USD, it is only equivalent to 6% of the king coin's daily trading volume.

So, the most pessimistic assumption is that if all creditors receive their BTC refund at the same time, and they all choose to sell it all at the same time, it would only be about 6% of the transaction volume.

The situation with BCH is more serious. The return value of Mt. Gox equivalent to 73 million USD, accounting for 24% of this coin's daily trading volume.

If only considering transaction volume, Bitcoin Cash's market liquidity will be difficult to absorb all the BCH sold without much impact on the price.

Presto Labs analyst Peter Chung wrote on X:


“Our analysis shows that the selling pressure for BCH will be four times greater than for BTC: 24% of BCH daily transaction value compared to 6% of BTC daily transaction value.”

Besides, it is necessary to consider the selling needs of creditors. During the long 10 years, if the user wants to sell the debts of Mt. Gox have been sold for a long time, there is no need to wait until now. They can sell on "property claim" trading platforms, similar to how FTX users can resell assets on the exchange for only 1/10 the price.

With such arguments, the creditors of Mt. Gox are currently rich people, genuine Bitcoin holders, and they have little need to receive BTC and then immediately dump it on the market.

Mr. Peter Chung explained:

"Weak creditors have had many opportunities to sell their property claims to many other entities for a long time, so we can safely assume that the current group of creditors are only rich BTC speculators." Have."
But with Bitcoin Cash it is completely opposite. This project hard forked from Bitcoin 3 years after Mt. Gox declared bankruptcy, meaning BCH was an attached airdrop and not actually an asset that users actively held.

Therefore, when creditors receive BCH, they will likely sell it immediately to get cash.

Regarding trading strategy, Presto Labs analysts suggest that traders can long BTC combined with short BCH to ensure maximum profits.
BTC price is trading around $58,000, down 5% in the past 24 hours.
The BCH price recorded a similar decrease, currently priced around $358.