The upcoming repayments of $8.5 billion worth of Bitcoin by Mt. Gox creditors starting in July have stirred considerable speculation about their impact on the cryptocurrency markets, particularly for Bitcoin and Bitcoin Cash (BCH).

Mt. Gox, once a prominent Japanese cryptocurrency exchange, suffered a devastating hack in February 2014, resulting in the loss of approximately 940,000 BTC, valued at just $64 million at that time. Over the years, Mt. Gox has managed to recover 141,687 BTC, now valued at $8.5 billion, which will be distributed to creditors beginning next month.

Analysts have debated whether this influx of Bitcoin into the market will adversely affect Bitcoin's price. Tony Sycamore, an analyst at IG Markets, believes that a significant portion of the potential sell-off pressure from Mt. Gox creditors has already been factored into current market conditions. He estimates that up to $4.5 billion worth of Bitcoin could hit the market in July but suggests that the market has been anticipating these repayments for some time.

"The repayments have been coming for a long time," Sycamore noted, indicating that market sentiment, technical selling, and shifts in investment flows away from crypto to other sectors like equities have already adjusted to this expected event.

Despite concerns, Sycamore remains cautiously optimistic about Bitcoin's price stability, pointing to robust support levels around the 200-day moving average as a potential buffer against further declines. He sees the recent market sell-off, partly driven by expectations of Mt. Gox selling, as possibly offering an attractive entry point for investors seeking opportune buying levels.

In contrast to widespread fears, Alex Thorn, head of research at Galaxy Digital, suggested in a June 25 post that the actual impact on Bitcoin could be less severe than anticipated. He estimates that only about 65,000 BTC out of the total 141,687 BTC will enter the market initially. This reduction in expected sell-off activity is attributed to many creditors opting for an early payout, where they forfeit 10% of their repayment but receive their Bitcoin sooner.

Thorn also highlighted the resilience of Mt. Gox creditors, many of whom are long-term Bitcoin holders with a strong preference for retaining their Bitcoin holdings rather than converting them to fiat currency. He emphasized that these creditors resisted numerous offers to settle in US dollars over the years, underscoring their commitment to Bitcoin as a long-term investment.

Moreover, Thorn pointed out that the potential impact on Bitcoin Cash (BCH) could be more pronounced. Unlike Bitcoin, where creditors have a direct stake, BCH was obtained indirectly through the hard fork from Bitcoin in 2017. Thorn suggested that this could lead to a "far worse" scenario for Bitcoin Cash, as these investors may not have the same attachment to BCH as they do to Bitcoin.

As the cryptocurrency market braces for these significant developments, the handling of Mt. Gox repayments will likely provide further insights into how such large-scale events impact digital asset markets and investor behavior.