Bitcoin 'Downside Risk' Looms Yet Again In July: JPMorgan

JPMorgan JPM analysts are predicting a potential bump in the road for Bitcoin BTC/USD prices this July.

What Happened: Their report, released Wednesday, highlights the upcoming repayments to creditors of defunct crypto exchange Mt. Gox as a source of downward pressure on the market.

“A similar downside risk looms in July with Mt. Gox creditors,” the report states, led by analyst Nikolaos Panigirtzoglou, according to The Block.

This concern stems from the expectation that some creditors will sell a portion of their recovered Bitcoin.

The analysts point to the recent distribution of crypto assets to Gemini Earn product creditors as a precedent.

After receiving their holdings in late May, these creditors, presumed to be mostly retail investors, likely engaged in some selling, according to JPMorgan.

This aligns with the observed decrease in Bitcoin prices since the May 29 distribution.

Mt. Gox creditors stand to receive a significant amount of Bitcoin – an estimated 142,000 coins, valued at roughly $9 billion currently.

While the repayment deadline extends to October, JPMorgan expects most to occur in July.

“Assuming most of the liquidations by Mt. Gox creditors take place in July, [that] creates a trajectory where crypto prices come under further pressure in July, but start rebounding from August onwards,” the report suggests.

Also Read: Ethereum ETF Inflows Could Be Up To 50% Of Bitcoin ETF Inflows: Galaxy Research

Why It Matters: A potential silver lining emerges later in the year.

FTX, another bankrupt crypto exchange, is also expected to make creditor repayments in the coming months.

Unlike Mt. Gox, these repayments will be in cash, not cryptocurrency.

JPMorgan analysts believe these cash injections could buoy the market, particularly as crypto-focused creditors might reinvest the funds back into digital assets.

“The problem for crypto markets is that there is likely a gap of around three months between potential Mt. Gox creditor liquidations in July and FTX creditor reinvestments in October/November,” the report concludes.

The Benzinga Future of Digital Assets event on Nov. 19 offers a valuable opportunity to gain insights from industry leaders and navigate these dynamic market shifts.

Read Next: Bitcoin Continues Sideways Despite $21M ETF Inflow On Wednesday

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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