In July, the cryptocurrency market braces for potential turbulence as selling pressure may emanate from creditors of the defunct Bitcoin exchange, Mt. Gox, according to a research report released by JPMorgan on Wednesday.

Earlier this week, the trustee overseeing the Mt. Gox exchange announced that repayments to creditors would commence in July. This proclamation has already caused apprehension within crypto markets, as there’s a prevailing fear that a significant number of creditors might liquidate their Bitcoin holdings once received. The creditors are anticipated to receive a total of 142,000 Bitcoins, which are currently valued at approximately $9 billion.

“These concerns are warranted,” analysts led by Nikolaos Panigirtzoglou stated, “especially in light of recent actions by Gemini creditors, who are presumed to have sold off a portion of their crypto assets received in recent weeks.”

Read more: Bitcoin Nears $60K Amid Mt. Gox Reimbursement News, Potential Market Impact Less Dire

The bank’s analysis reveals that the downturn in crypto prices since May 29th indicates that some Gemini creditors, predominantly retail investors, have likely taken partial profits recently. This follows Gemini’s announcement on May 29th, confirming that its Gemini Earn users had reclaimed all their digital assets in-kind, subsequent to a settlement with Genesis.

While the official deadline for Mt. Gox creditor repayments is set for October, the bulk of these reimbursements are anticipated to occur in July. Should the majority of Mt. Gox creditors indeed opt to liquidate their holdings in July, a sell-off in the crypto markets is expected, with a possible rebound projected for August, according to the report.

Furthermore, cash disbursements to creditors of the bankrupt crypto exchange FTX, anticipated post-October 7, could potentially bolster the markets. However, the report highlights a concern: a temporal gap of approximately three months exists between the potential sell-off by Mt. Gox creditors and the subsequent reinvestment by FTX creditors later in the year.

Key Takeaways:

• Market Volatility in July: Cryptocurrency markets may face significant selling pressure due to Mt. Gox creditors receiving 142,000 Bitcoins.
• Recent Creditor Behavior: The concerns are heightened by recent actions of Gemini creditors, who have been liquidating crypto assets.
• Timing of Repayments: While the deadline for Mt. Gox repayments is in October, most transactions are expected in July, potentially leading to a market sell-off.
• Future Market Support: FTX creditor payments, expected after October 7, might support the market, but there’s a notable gap between the two events.

By adhering to these insights, crypto market participants can better navigate the anticipated fluctuations and strategize accordingly for the upcoming months.