Cryptocurrency analysts predict that Mt. Gox refunds will impact Bitcoin Cash more significantly than Bitcoin itself. Presto Labs Research Manager Peter Chung highlighted concerns about the potential selling pressure resulting from Mt. Gox’s bankruptcy affecting Bitcoin’s price.
Chung emphasized that fears of Bitcoin’s decline due to this selling pressure were unwarranted. Instead, he pointed out that Bitcoin Cash (BCH) faces a more substantial risk. Mt. Gox’s upcoming distribution includes approximately $9.5 billion in BTC and 143,000 BCH, valued at around $73 million.
According to CoinGecko data, Bitcoin Cash’s daily transaction volume stands at $308.8 million, with redemptions potentially accounting for 24% of this figure. Chung’s analysis indicates that BCH could experience four times the selling pressure of BTC, which only faces 6% of its daily trading volume.
He further noted that Bitcoin has likely seen limited selling pressure as many creditors who intended to exit have already done so through bankruptcy markets. In contrast, Bitcoin Cash, which emerged three years after Mt. Gox’s collapse, may be perceived by creditors as an airdrop and sold off swiftly.
Chung recommended a market-neutral strategy to mitigate BCH’s selling pressure, suggesting pairing long BTC perpetuals with short BCH perpetuals, despite the associated funding rate risks. He also proposed alternatives like shorting futures or borrowing BCH in the spot market to manage funding rate exposure.
As always, Chung clarified that these insights are not investment advice. For those interested in cryptocurrencies, platforms like Binance offer opportunities to engage with over 300 different digital assets.
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