According to a research from UBS (NYSE: UBS), worries about the release of significant sums of Bitcoin (CRYPTO: BTC) onto the market as a result of the Mt. Gox bankruptcy repayments are exaggerated.
During a ten-year liquidation procedure, creditors of the now-defunct Bitcoin exchange will eventually receive part of their money, but the rehabilitation plan gives them a variety of repayment and scheduling alternatives.
The most crucial options for creditors, according to the UBS analysis, are obtaining the money in fiat or cryptocurrency, taking an early lump amount, or waiting for more procedures and asset recovery.
The early lump-sum option with fiat repayments, according to the strategists, "suggests that the exchange would have to sell Bitcoin to generate the necessary funds," which has in the past stoked worries about potential negative effects on Bitcoin's price.
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Even though the exchange reported 850,000 Bitcoin missing in 2014, the firm has only been able to recover 142,000 Bitcoin, 143,000 Bitcoin Cash (CRYPTO: BCH), and 69 billion Japanese yen ($510 million), which makes up around 20% of the hack.
The bank also points out that active supply increases are frequently accompanied by declines in the price of bitcoin.
UBS underlines that given that many of the early users of Bitcoin remain believers in cryptocurrencies, the reality is probably going to be considerably less dramatic.
The bank cites recent data that show two of the biggest creditors, who together have 20% of the claims, chose the cryptocurrency payout, indicating that new supply to the market may be less concentrated.