Although Bitcoin (BTC) has made gains in the short term, the cryptocurrency is still under pressure amid sustained capital outflows. Most of the market attributes this to the influx of BTC from the Mt. Gox repayments.
However, in an X post on July 6, American economist and crypto skeptic Peter Schiff lambasted BTC enthusiasts for attributing the recent slump in Bitcoin’s price to the ongoing repayment of Mt. Gox creditors.
Schiff argued that this explanation is overly simplistic and deflects from a more fundamental issue within the cryptocurrency market. He suggested that the selloff reveals a lack of genuine institutional demand for Bitcoin.
According to Schiff, if such demand were as robust as many Bitcoin proponents claim, institutional buyers would seize the opportunity to acquire Bitcoin from the Mt. Gox repayments off-market, mitigating any negative price impacts.
“Bitcoin pumpers blame the decline on Mt. Gox repayment related sales. While this is part of the story, the rest is that the selloff exposes the myth of institutional demand. If such demand really did exist, buyers would jump at the chance to buy the Mt. Gox Bitcoin off market,” Schiff said.
Impact of Germany selling BTC
Besides the Mt. Gox selling, some market players have attributed the Bitcoin slump to a decision by the German government to sell the asset. However, the economist maintained that selling by the government should not be felt if institutions were indeed interested in the crypto space for the long term.
The same thing. Institutions that need to buy in size would step up. There would be no impact on the market.
— Peter Schiff (@PeterSchiff) July 6, 2024
Notably, Schiff’s sentiments come at a point where some argue that institutional demand for Bitcoin remains strong, pointing to recent announcements from major financial institutions entering the cryptocurrency space, primarily through spot exchange-traded funds (ETF).
Schiff, a long-time critic of Bitcoin, has frequently warned of its inherent risks and weaknesses. He has consistently argued that Bitcoin lacks intrinsic value and is susceptible to speculative bubbles and market manipulation.
It’s worth noting that many in the cryptocurrency community have cited the Mt. Gox repayment process, long-awaited by creditors, as a significant factor influencing Bitcoin’s recent price movements.
Impact of Mt. Gox repayments
Mt. Gox, the infamous Tokyo-based Bitcoin exchange that filed for bankruptcy in 2014 after losing approximately 850,000 Bitcoins to hackers, is finally beginning the process of repaying creditors. The current amount is valued at almost $9 billion. Already, the exchange has sold and sent out almost 50,000 BTC.
Despite the current bearish momentum, Schiff has maintained that the Bitcoin selloff will likely escalate. The economist noted that 100% of Bitcoin ETF buyers will lose money when BTC trades below $38,000.
Meanwhile, Bitcoin is targeting sustaining gains above the $57,000 support. By press time, Bitcoin was up almost 2.5% in the last 24 hours, trading at $57,083.
