Several hours ago it was reported that the Mt. Gox trustee will no longer be selling Bitcoin to reimburse users, bitcoin will be issued instead.
Decentralization of a Big Bitcoin Seller
According to the report from Coin Telegraph Mt. Gox has entered civil rehabilitation proceedings and the plan to reimburse users with fiat is no longer on the table. They will be given bitcoin instead.
So essentially, this giant single seller we had in the market is now gone. This is usually something to celebrate because a large seller in any asset makes it very difficult for that asset to rise in price.
The irony here is that one of the things people love about crypto is the decentralized nature of it. Well, we just got it as now all that bitcoin will be spread amongst all the affected users.
Begs the Question
Does that mean the selling pressure has changed?
In a way yes, because you don’t have a single entity selling large market moving chunks.
However, the same amount of supply is still available. The difference now is it is spread out over many users who may sell everything they receive, sell some of it or even decide to just keep it.
So while the supply side has not change. The selling pressure has.
Crowd of Sellers
According to the report users being reimbursed are likely to receive bitcoin in early to mid 2019. Like it or not that will be a large crowd of potential sellers next year.
In the meantime will we see bitcoin rally the second half of 2018? It’s not off to a good start as bitcoin sold off hard just before and during this news announcement and is now below the April 2018 lows.
One opinion I can give – this thing looks a bit oversold again. 5,800 area is a level I have my eye on.
For the full cointelegraph article go here: https://cointelegraph.com/news/mt-gox-crypto-exchange-begins-civil-rehabilitation-proceedings-ends-bitcoin-sell-offs
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