JPMorgan: Mt. Gox Creditors May Sell Some Bitcoin in July to Recover Funds, Crypto Market Expected to Recover Gradually After August

June 27 (Bloomberg) -- Bankrupt cryptocurrency exchange Mt. Gox recently announced that it will begin distributing bitcoin repayments to its creditors next month, totaling about 142,000 bitcoins valued at about $9 billion at current prices, according to The Blcok. Analysts at JPMorgan Chase expect that the market may come under pressure in the short term as creditors may sell some of their bitcoins to recoup funds. However, analysts also noted that the cryptocurrency market could gradually recover after August as the market adapts and digests.

Meanwhile, creditors of FTX, another bankrupt crypto exchange, are also expected to receive repayments in the form of cash in the coming months, totaling an estimated $14 billion to $16 billion. Unlike Mt. Gox and Gemini's physical repayments, FTX's repayments will be in cash, which helps to directly increase market liquidity. Analysts believe that these cash repayments could be reinvested back into the market by the cryptocurrency's native creditors, further supporting the recovery of the cryptocurrency market.

However, analysts also warn that there could be a gap of around three months between the potential liquidation of Mt. Gox creditors and the reinvestment by FTX creditors, which could create some uncertainty in the market. In particular, the cryptocurrency market could come under further pressure in July when Mt. Gox creditors begin liquidation. But in the long run, the market is expected to gradually regain stability as FTX creditors reinvest.

Last month, creditors of the Gemini Earn product have received $2.18 billion worth of digital assets. Considering the recent volatility in the cryptocurrency market, JPMorgan analysts speculate that some of the creditors may have sold some or all of these assets for profit in the near future.