Opinion: Excess supply in the market may continue to push down BTC prices

Crypto markets may have to deal with potential turbulence in the coming months as several major Bitcoin (BTC) holders — including defunct exchanges and government entities — may liquidate large amounts of their holdings. Crypto markets are currently facing a severe oversupply problem, according to a new report from crypto data provider Kaiko. This has been a persistent theme throughout the summer, with forced selling and liquidations of bankrupt crypto assets causing selling pressure at various stages between May and August. Rob Hadick, general partner at Dragonfly, said that Bitcoin prices have come under significant pressure this summer, mainly related to Mt. Gox issuance, yen carry trades, and slowing demand. "The market remains concerned about government holdings and pressure from additional issuance from Mt. Gox," he said. One of the main sources of market anxiety is the ongoing redistribution of funds to Mt. Gox creditors. The bankrupt cryptocurrency exchange's assets still hold more than 46,000 bitcoins, worth more than $2 billion, which will eventually be redistributed. Elaborating on the potential impact of such a distribution, Fideum co-founder Darren Franceschini said that according to forecasts, these bitcoins, worth more than $2.7 billion, could be almost all sold - if creditors sell their entire holdings, it could add $8.2 billion in additional selling pressure. Other major holders could also add to selling pressure in the near future. For example, the U.S. government holds more than $2 billion worth of bitcoin. In addition, he added that other countries including the United Kingdom, China and Ukraine also have large bitcoin reserves. Bartosz Lipiński, CEO of cryptocurrency trading platform Cube.Exchange, said, "If authorities begin to liquidate their holdings on a large scale, the 'Christmas rally' that many cryptocurrency enthusiasts often see may not be realized for the first time this year."