Mt. Gox Repayments: A Bitcoin & Bitcoin Cash Trading Opportunity?
Coindeskβ€’6 days agoβ€’
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Mt. Gox Repayments: A Bitcoin & Bitcoin Cash Trading Opportunity?

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Summary:

  • Presto Labs suggests a market-neutral strategy to profit from the Mt. Gox repayments by betting on Bitcoin (BTC) strength and against Bitcoin Cash (BCH).

  • The strategy is based on the different investor sentiments towards BTC and BCH, with BTC investors expected to be more diamond-handed.

  • Presto's analysis shows four times larger selling pressure for BCH compared to BTC, creating a potential pair trading opportunity.

  • The Mt. Gox repayments present a unique scenario for traders to leverage the differing supply/demand dynamics of BTC and BCH.

  • Disclaimer: This is not financial advice. Conduct thorough research and understand the risks before investing.

Mt. Gox Repayments: A Trading Opportunity?

The long-awaited repayments to creditors of the defunct Mt. Gox exchange are finally underway, and this has sparked a trading opportunity for savvy investors. Singapore-based trading firm Presto Labs suggests a market-neutral strategy that capitalizes on the supply/demand dynamics of both Bitcoin (BTC) and Bitcoin Cash (BCH).

The Strategy:

  • Long BTC: Investors are expected to hold onto a portion of their BTC repayments, due to their long-term belief in the asset. This suggests lower selling pressure for Bitcoin.
  • Short BCH: The BCH investor base is considered weaker, with a higher likelihood of selling their entire repayment. This implies stronger selling pressure for Bitcoin Cash.

Presto's analysis reveals a significant discrepancy in the expected selling pressure between BTC and BCH, with BCH facing a four times larger sell-off compared to BTC. This creates a potential pair trading opportunity where investors can profit from the relative price movements of the two cryptocurrencies.

Key takeaway: The Mt. Gox repayments offer a unique scenario where the differing investor sentiment towards BTC and BCH can be leveraged for potential profit.

Disclaimer: This information is not financial advice. It's crucial to conduct thorough research and understand the risks before making any investment decisions.

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